MINBOS RESOURCES LIMITED - Interim / Quarterly Report 2013

Half Year Report

For the period ended 31 December 2012

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ABN 93 141 175 493

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Corporate Directory	3
Review of Operations	4
Directors’ Report	25
Lead Auditor’s Independence Declaration	29
Consolidated Statement of Profit or Loss & Other Comprehensive Income	30
Consolidated Statement of Financial Position	31
Consolidated Statement of Changes in Equity	32
Consolidated Statement of Cash Flows	33
Notes to the Consolidated Financial Statements	34
Directors’ Declaration	41
Independent Auditor’s Review Report	42

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Corporate Directory

Directors & Officers

Mr Scott Sullivan - Managing Director Mr Peter Richards - Non-Executive Chairman Mr David Reeves - Non-Executive Director Mr John Ciganek - Non-Executive Director Mr Domingoes Catulichi - Non-Executive Director

Mr James Carter - Chief Financial Officer Mrs Tanya Woolley - Company Secretary

Securities Exchange

Australian Securities Exchange Limited (ASX) Home Exchange - Perth ASX Code - MNB (Ordinary Shares)

Share Registry

Security Transfer Registrars 770 Canning Highway Applecross WA 6153 Website: www.securitytransfers.com.au

Solicitors

Steinepreis Paganin Level 4, The Read Buildings 16 Miligan street Perth WA 6000 Website: www.steinpag.com.au

Auditors

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008 Website: www.bdo.com.au

Registered Office

C/- Blue Horse Corporate 108 Outram Street West Perth WA 6005

T: +61 (08) 9476 4500 F: +61 (08) 6314 1587 E-mail: [email protected] Website: www.minbos.com

Principal Place of Business

Perth Office Level 1, 278 Stirling Highway Claremont WA 6010

PO Box 1346 West Perth WA 6872

South African Office

Ground Floor, Unit 1, Ferndale Mews 15 Dover Street Randburg, Johannesburg 2194

PO Box 1577 Randburg, Johannesburg 2125

Domicile and Country of Incorporation

Australia

Australian Company Number

ACN 141 175 493

Australian Business Number

ABN 93 141 175 493

Public Relations

Professional Public Relations (PPR) 588 Hay Street Subiaco WA 6008 Website: www.ppr.com.au

Bankers

National Australia Bank Fremantle Business Banking Centre Level 1, 88 High Street Fremantle WA 6160 Website: www.nab.com.au

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

GROUP OVERVIEW

Minbos Resources Limited (“Minbos” or “the Company”) was incorporated on 17 December 2009 and listed on the Australian Securities Exchange (“ASX”) on 18 October 2010 (ASX code: MNB). Minbos is a company limited by shares that is incorporated and domiciled in Australia. The information presented in this section is applicable to the half year ended 31 December 2012 (“Period”) and up until the date of this report being lodged with the ASX.

Minbos is an exploration and development company with its focus on phosphate bearing deposits within the Cabinda Province (“Cabinda”) of Angola and the adjoining areas of the far western Democratic Republic of the Congo (“DRC”). Through its subsidiaries and joint ventures, the Company is progressing Bankable Feasibility Studies (“BFS”) upon the high grade Cacata and Kanzi projects, while continuing to explore over 400,000 ha of highly prospective ground hosting phosphate bearing deposits.

In November 2012 the Company raised $1.71 million via a placement to sophisticated investors. Since listing and up to date of this report, Minbos Resources Limited and its Controlled Entities (“the Group”) has used its funds in accordance with the business objectives originally stated in its prospectus and subsequent announcements made thereon. It is the intention of the Company to continue to use funds on the on-going development of its current projects and stated business objectives.

The Company’s strategy is to specifically target the exploration and development of low cost fertiliser-based commodities in order to tap into the growing global demand for fertilisers. Phosphate is an essential component in certain agricultural fertilisers, with the market supported by the increasing global demand for food and bio-fuel products, in tandem with growing pressure on food producers to improve the productivity of existing arable land.

(a) Highlights

The highlights during the Period include:

Board and CFO appointments - Minbos appointed a new Managing Director, Mr Scott Sullivan, and Chief Financial Officer, Mr James Carter.
Capital Raising - Minbos raised $1.7 million at 14 cents per share to progress Bankable Feasibility Studies for projects in Angola and DRC.
Cacata Operations – Excellent testwork results received from beneficiation testwork on samples from the Cacata diamond drill core, confirming results from earlier campaign carried out on aircore samples.
Minbos formed a Joint Venture with Allamanda Trading Ltd (“Allamanda”) for the exploration and development of the Kanzi project and surrounding exploration areas in the western Democratic Republic of Congo.
Kanzi Scoping Study – Positive results were received from the scoping study completed on the Kanzi Phosphate Project (“Kanzi”). The study demonstrated positive economics, confirming the potential of Kanzi as a viable project with forecast pre-tax cash flows in excess of US$1.5 billion over a 17-year mine life.
Kanzi Drilling Results – A total of 171 aircore holes were drilled, the results of which confirm Minbos’ understanding of Kanzi deposit and the high project potential. 89 infill holes were drilled to enable the upgrade of the resource from Inferred to Indicated JORC category. 71 holes were drilled in the targeted area of first mining to enable more detailed modelling and planning for the pit. 11 holes were drilled to twin holes previously drilled in 2011.
Strategic Partner Tender Process – Initial phase of tender process has resulted in a high level of interest from potential strategic partners.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Since listing, Minbos has moved from an exploration company to a company that now has two projects in development stage plus a substantial resource - confirmation that Minbos is rapidly achieving its goal of becoming a low capex and opex phosphate rock producer and exporter.

Projects

Minbos holds a significant concession area of circa 400,000 ha in the Congo Basin running from Cabinda, Angola to Western DRC. The key projects include, as shown in Figure 1 :

Cabinda Phosphate (50% interest) - including Cacata, Mongo Tando, Chibuete, Chivovo and Ueca deposits with historical and/or current exploration data.
Western DRC Phosphate (49%-65% interest[1] ) – An interest in the Kanzi deposit which has both historical and current exploration data and an option on the Fundu-Nzobe deposits which has historical exploration data.

Figure 1: Phosphate Projects

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1 On 1 August 2012, Minbos announced JV ownership of 65%. Subsequently Minbos has been presented with a side agreement by its JV partner which seeks to apportion Minbos to 49%. Minbos is actively engaging with its JV partner to resolve this issue.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

(b) Resources

Since listing, Minbos has delineated a substantial resource of 370.1Mt @ 12.2% P2O5. Within this resource, two high grade projects have been identified at the Cacata and Kanzi Deposits. A summary of JORC resources is shown in Table 1 .

Table 1: JORC Resources

Deposit	Tonnes (Mt)	Grade (% P2O5)	Indicated or Inferred	Comments
Cabinda, Angola
Cacata	30.4	17.0	Indicated	Including 22.5Mt at 21.4% P2O5
Chivovo	6.7	20.3	Inferred
Mongo Tando	117.0	13.7	Inferred
Chibuete	150.0	8.3	Inferred	Including100Mt at 9.3% P2O5
Total*	304.1	11.5
Kanzi, DRC
Kanzi**	66.0	15.3	Inferred	Including 44Mt at 21.4% P2O5
Grand Total	370.1	12.2

A total of 254.1Mt at 12.6% P2O5 is contained within the resource and was used for satisfying the Performance A milestone whereby 25,000,000 Class A Performance Shares were converted into fully paid ordinary shares upon delineation of a JORC compliant resource of at least 250mt at an average insitu grade of greater than 12.5% P2O5 within the area covered by the Cabinda project within 18 months of the issue of these shares. Cut off grades varied from 5-10% depending on deposit.

** Class C Performance Shares shall convert to ordinary shares upon delineation of JORC compliant mineral resource at the Kanzi project of greater than 25Mt at greater than 12.5% P2O5 on the area before 18 April 2013.

1. CABINDA PROJECT

(a) History and Ownership

The Cabinda licence area covers an area of approximately 200,000 ha and all the known and historically explored phosphate Prospects in Cabinda, Angola.

Historical work was completed by Companhia de Fosfatos de Angola (“COFAN”) during the period 1969 to 1973 and then during the early 1980’s by Energo from Bulgaria. The work included over 45,000 metres of drilling, which identified six deposits within the licence area and preliminary beneficiation test work.

The Cabinda exploration permit (006/06/01/L.P./GOV.ANG.MGM/2010) is held by joint venture company, Mongo Tando Lda (“MTL”). MTL is owned (via local subsidiaries) 50% by Minbos and 50% by Petril Projects Ltd.

The Cabinda licence area contains six exploration projects: Mongo Tando, Chibuete, Ueca, Cacata, Chivovo and Cambota (as shown in Figure 2 below). The most advanced of these projects is the high grade Cacata Project.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Minbos has classified the Projects within Cabinda into two distinct categories:

 Eastern Limb Deposits

Cacata, Chivovo and Cambota make up the Eastern Limb deposits. These deposits are smaller than those of the Western Limb but are in the main significantly higher grade at +20% P2O5.

Minbos’ focus during the financial period has been the rapid advancement of the Cacata Project, which is now at BFS stage.

 Western Limb Deposits

Mongo Tando, Chibuete and Ueca make up the Western Limb deposits. These deposits are characterised by large tonnage and make up the bulk of the current overall resource estimate.

Figure 2: Map of Cabinda Exploration Permit

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Cacata deposit

The Cacata Project lays on the Eastern most boundary of the exploration permit in Cabinda and currently has an Indicated Mineral Resource estimated at 30.4Mt @ 17% P2O5 (including 22.5Mt @ 21.4% P2O5). The high grade nature of the deposit and its excellent location (close proximity to infrastructure and the coast) meant that it became the focus of a near term development project for Minbos.

Cacata Scoping Study

During 2012, the joint venture company, Mongo Tando Limited, completed a scoping study to assess the economics of developing a standalone phosphate rock export operation to produce 0.8Mtpa of phosphate rock concentrate over a 10 year life of mine (“LOM”).

The scoping study delivered the following positive results[2] :

Operating costs of US$57.23 per tonne free-on-board (“fob”) of phosphate rock;
Capital cost estimate of US$157m, based on owner operated mining, road haulage and ship loading;
Strong opportunity to further reduce capital and operating costs during the BFS;
IRR of 40.2 % (pre-tax); and
NPV of US$311m (pre-tax) at a 10% discount rate.

General

The scoping study is based on the JORC high grade Indicated Mineral Resource of the Central and Northern sections of the Cacata deposits and demonstrates the robust nature of the Cacata high grade project, resulting in the immediate commencement of a BFS.

Mining

Coffey Mining (“ Coffey ”) was commissioned to conduct an evaluation of the viability of mining, the high grade portion of the Cacata deposit. The Coffey report concluded that using a truck and shovel approach the high grade portion of Cacata could be mined at a 1.2 million tonnes per annum (“ Mtpa ”) of Run of Mine (“ ROM ”) at a strip ratio of 1.74:1 (waste to ROM) and a ROM bench height of 3.7m.

The economical evaluation was based on the mining equipment being purchased and operated by the owner and a conservative allowance for availability and utilization. Coffey have also made allowances for replacement capital during the 10 year LOM.

Coffey have derived costs from first principles and their experience in West Africa mining projects that:

the initial Capex would be US$9.5m and
the average mining cost of US$5.72/t phosphate rock produced.

Processing

DRA Minerals Projects (“DRA”) was commissioned to conduct a technical and financial evaluation of the viability of processing the high grade portion of Cacata.. The basis for the evaluation was a mineral processing test work campaign carried out by Mintek Laboratories (“Mintek”) on a sample supplied by MTL from the recent PQ diamond drilling campaign.

2 Amounts quoted are for 100% of the Project. Minbos currently owns 50% of the project, with the remaining 50% held by Petril Projects Ltd.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

The processing route is a basic washing and selective screening operation which by its nature is a low energy consumer and operator friendly. The processing route as shown in Figure 3 is as follows:

the ROM is attrition scrubbed to remove lumps and clay agglomerates;
the attrition scrubber discharges over a desliming screen;
the screen undersize (-2.36mm) is further deslimed and the oversize (+2.36mm) is discarded;
the - 2,36mm + 106 micron phosphate rock is de-watered in a vacuum belt filter and then passed through a rotary drier to produce a 2 - 3% moisture content phosphate; and
the concentrate grade is expected, based on the Mintek test work, to be relatively high grade i.e., above the Moroccan benchmark grade of 32 - 33% P2O5.

Figure 3: Process Flow Diagram

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DRA have derived costs based on their internal data base and experience in African mining projects that:  the capex would be US$54.8m; and

the operating cost would be US$25.12/t of phosphate rock recovered.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Tailings Storage Facility

SRK Consulting (“ SRK ”) was commissioned to conduct a technical and financial evaluation of establishing a 1.0mtpa tailings storage facility (“ TSF ”). SRK derived costs based on their internal data base and experience in African mining projects which indicate that:

the capex would be US$6.8m; and
the operating cost would be US$0.50/t of phosphate rock recovered.

Phosphate Rock Transport and Ship Loading

Ports of Africa (“ POA ”) was commissioned to conduct a technical and economic evaluation of the viability of the logistics of transport by road and ship loading of 1.0mtpa of phosphate rock from the Cacata processing plant to a new ship loading site located 7km from the town of Cacongo.

As part of the Scoping Study, POA carried out a data collection exercise, made a site visit to review potential port sites and assessed existing infrastructure. Based on this and their experience in Africa POA proposed that:

a 20kt phosphate rock covered bulk storage and truck loading facility will be required at the processing plant site, as shown in Figure 4 ;

Figure 4: Bulk Storage & Bulk Loading Facility

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the phosphate rock product will be transported on existing tarred roads to a new port site just north of the coastal port town of Cacongo, 90km from the Cacata deposit, (as shown in Figure 5 ); and

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Figure 5: Transport Route from Cacata High Grade Project to New Loading Site Change Map

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at the new port site a 50kt covered bulk storage and loading facility to load low draught 5,000t barges will be required and these barges will load bulk vessels (e.g. Panamax) anchored offshore (as shown in Figure 6 ).

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Figure 6: Bulk Storage and Barge Loading PFD

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POA has derived costs from their internal database of projects and experience in African mining projects which indicated that:

the capex would be USD $22.5m for the construction of the product handling, storage and loading equipment at the Cacata mine site and the purchase of road trucks;
the capex would be USD $57.5m for the construction of the new port area loading equipment and the purchase of marine fleet;
the operating cost would be USD $13.63/t for road transport of phosphate rock from Cacata mine site to new port area; and
the operating cost would be USD $3.25/t for ship loading of phosphate rock.

Infrastructure

The following infrastructure has been allowed for in the capex:

offices;
power generation (5 mw) by diesel generators;
7km of new tarred road and internal haul roads
water reticulation;
housing recreation and messing facilities;
workshops for mining, processing, phosphate rock, transport and ship loading;
security and fencing;
fire fighting;
change houses;
sewerage disposal;
communications and IT; and
fuel storage.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Capital Cost

The total capital cost has been estimated at USD $157.0m (including EPCM and contingency) as detailed below in Table 2 :

Table 2: Capital Costs

Description	Cost USD$m
Mining Processing Plant Tailings Storage Facility Product Storage & Transport (Land) Product Storage & Loading (Sea) Owners Costs	$9.5 $54.8 $6.8 $22.5 $57.5 $6.0
Total	$157.1

The capital cost estimate includes the purchase of the mining fleet and the road haulage fleet; this could be reduced by approximately USD $18m utilising a contract mining and road haulage fleet approach. A further possible capital cost saving could be achieved by outsourcing the Marine operation; this will be investigated in the BFS.

Operating Costs

The cash operating cost has been estimated at USD $57.22/t FOB Cabinda of phosphate rock as follows, as shown in Table 3 :

Table 3: Operating Costs

Description	Cost USD$/t
Mining Processing Plant Tailings Storage Facility Product Transport (Land) Product Loading (Sea) General and Administration	$5.72 $25.12 $0.50 $13.63 $3.25 $9.00
Total	$57.22

The operating cost is based on owner operator road transport derived from first principles. From an initial estimate by a transport contractor, a saving is expected in utilising the contractor approach and this will be investigated during the BFS.

The operating cost is based on diesel on site power generation. A 35Mw power station is currently being constructed in Cabinda. During the BFS this option will be investigated as it could also provide an operating cost savings.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Marketing and Product Pricing

At the target production rate of 0.8mtpa of phosphate rock product, the Cacata project will have a 10 year LOM. Current market analysis shows that this product will be in demand and readily absorbed by the market. Our base case analysis has assumed a selling price of USD $180/t[3] FOB Cabinda as follows:

CRU has developed a model for estimating the likely pricing of a new phosphate rock product entering the market which has taken into consideration the phosphate rock grade, chemical characteristics and CRU's knowledge of actual phosphate rock contract provisions.
This analysis has determined that the Cacata phosphate rock is likely to trade at an approximately 9% premium to the Moroccan benchmark price which has had an average price in 2012 of USD $193.90 (USD $211.35 with 9% premium) compared to the revenue per ton used of USD $180 in the cash flow model.

Financial Model

The results of cash flow model developed from the scoping study are shown in Table 4 and are as follows:

the cash flow model is a base case scenario and does not take into account the potential upside as a result of contracting out all or part of operations; and
the cash flow model has been prepared on a pre-debt funding and before tax and duties basis and as a result does not show the benefits of leverage or after tax cash flows.

Table 4: Financial Model

	Per Tonne	Total
	(USD$)	(USD$ 000)

Revenue	180.00	1,358,460
Direct Mining Costs
Mining	5.72	43,174
Processing	25.12	189,567
Tailings Storage Facility	0.50	3,773
Product Transport (Land)	13.63	102,903
Product Transport(Sea)	3.25	24,539
Direct Mine Costs	48.22	363,956
General and Admin	9.00	67,923
Total Operating Costs	57.22	431,879

Total Cash Produced	122.78	926,581

3 Source: CRU Strategies. Cacata Scoping Study, date Jan 2012

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

When compared to the previously published CRU report that investigated a cost curve positioning, the project has the following characteristics:

an operating cost of USD $57.22/t will place the project in the lower half of the cost curve; and
the capex cost of USD $157m, places the project in the lower half of the capital intensity cost curve (capital/production per annum) with an enhanced possibility of reducing this to a bottom quartile capital intensity project during the BFS.

Figure 7: Sensitivity Graph

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The scoping study demonstrates the robust nature of the Cacata high grade project, resulting in the immediate commencement of a BFS.

Beneficiation Testwork

During the Period, the Company received positive results from beneficiation testwork on diamond drill core. The objective of the testwork program was to determine the cut-off grade for Cacata deposit which distinguished between material which can be upgraded by scrubbing only and that which requires milling and floatation to upgrade.

For the purposes of the scoping study, an assumption was made that the cut-off grade would be 26% P2O5 for “scrubable” material at a recovery of 77%.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Following the completion of the testwork, in summary, the conclusions are that:

The material grading +23% P2O5 can be upgraded by wet screening and scrubbing thus potentially increasing the quantity of ‘scrubable’ material at Cacata and thereby affording the options to either increase the life of the project the mine with a basic low cost, non-flotation processing circuit, or allow the throughput and production to be increased.
The phosphate material grading 16% to 23% P2O5 is upgradable by milling and floatation to +33% P2O5.

Outlook

It is expected that this project will allow Minbos to establish credibility in the global phosphate rock market and thereafter, with a robust cash flow, provide options for the development of the much larger Western Projects.

The Company’s confidence in the robustness of the project economics has already led the partners to commence work on several long lead items of the BFS such as diamond drilling to upgrade mineral resource estimates and environmental work at the mine and port sites.

(b) Chivovo deposit

The Chivovo Project lies within the same mineralised structure as Cacata and is in close proximity to Cacata. The high grade nature of its deposit will allow it to be assessed as a potential input into the BFS Cacata Project.

The project currently has an Inferred resource estimate of 6.7Mt @ 20.3% P2O5. Drilling previously carried out in early 2012 is expected to upgrade the deposit to an Indicated Mineral Resource estimate category.

(c) Cambota deposit

Cambota is the third deposit identified in the Eastern Limb. Initial drill results confirm the potential high grade nature of the deposit and confirm the Company’s understanding that the Eastern Limb is host to smaller but high grade deposits. Additional drilling will be carried out to further test the potential of Cambota.

(d) Future Exploration

The Cacata and Chivovo deposits are located 40km along strike from each other. Both deposits lie within what Minbos describes an Eastern Limb geological structure and appears to host discrete, high grade deposits.

Project geologists have identified the geochemical “signature” for Cacata and Chivovo and plan to explore the area between the two deposits during the next dry season. Importantly, the Cambota deposit has already been identified (almost half way between Cacata and Chivovo).

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

2. DRC PROJECT OVERVIEW

(a) History and Ownership

The DRC project exploration licences and applications cover an area of approximately 200,000 hectares and host the previously drilled Kanzi and Fundu-Nzobe prospects. Historical work included approximately 4,000 metres of drilling and some initial beneficiation test-work.

The DRC phosphate prospects lie contiguous to the eastern portion of Minbos’ licences in Cabinda, are a direct extension of the Cabinda prospects and local occurrences of phosphate continue across DRC towards the Congo River.

On 1 August 2012, the Company announced the signing of a Joint Venture agreement (“JV”) with Allamanda Trading Limited (“Allamanda”) for the exploration and development of the Kanzi project and surrounding exploration areas in the western DRC. The JV company, Phosphalux SPRL (“Phosphalux”), is a special purpose DRC registered company, that undertakes the exploration activities across the Kanzi mining permit and several exploration licences, held by Allamanda. Minbos, through its 100% owned subsidiary Agrim SPRL (“Agrim”), holds a 65% interest in Phosphalux.

The Board has recently been presented with a side agreement by Allamanda that was purportedly entered into concurrently with the signing of the original JV agreement by Agrim, without the knowledge or consent of the Board of Directors of the Company, which seeks to apportion Minbos a 49% interest in the economic benefit of the Licences which form the Kanzi project, with a 51% economic interest held by Allamanda.

The licences held by Allamanda and their work status are summarised in Table 6 and illustrated in Figure 8 below.

Table 6 – DRC licences and their work status

Concession No.		Area Carres
	Type		Status	Location

12908	Exploration	382	Active - BFS	South - Covers Kanzi Deposit
12910	Exploration	302	Active - BFS	South - Covers Kanzi Deposit
12911	Exploration	375	Active - Exploration	South - Kanzi Adjacent

12905	Exploration	441	Exclusive Option	North - Covers Fundu Nzobe
12906	Exploration	81	Exclusive Option	South - Kanzi Adjacent
12907	Exploration	410	Exclusive Option	South - Kanzi Adjacent
12909	Exploration	327	Exclusive Option	North – Fundu Nzobe extension
12912	Exploration	376	Exclusive Option	South - Kanzi Adjacent
12913	Exploration	322	Exclusive Option	North - Fundu Nzobe Adjacent

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

(b) Kanzi Deposit

During the previous period, the Company announced a maiden Inferred Mineral Resource of 46Mt @ 17.2% P2O5 (including a high grade zone of 31Mt @ 21.4% P2O5) which was upgraded in August 2102 by 42% increase in high grade resources to 44Mt @ 21.4% P2O5 (up from 31Mt @ 21.4% P2O5); and an overall resource increase to 66Mt @ 15.3% P2O5 (up from 46Mt @ 17.2% P2O5). Further drilling will upgrade the resource from Inferred to an Indicated Mineral Resource, as announced in December 2012. Details are provided in Table 5 below.

Table 5 - Kanzi Project – Total Inferred Resource Estimate


Kanzi Project – Total Inferred Resource

Sample Cut-off grade (P2O5)	Total Tons
		Average P2O5 grade (%)
	(Million)

0%	66	15.3%
12.50%	44	21.4%

Scoping Study

In November 2012, the Company announced the completion of a scoping study on the Kanzi Phosphate Project to assess the viability of establishing a 1Mtpa phosphate rock export operation for a minimum life of mine (“LOM”) of 17 years.

The scoping study delivered the following positive results[4][4]

Operating costs of US$56.03 per tonne free-on-board (“ FOB ”) of phosphate rock;
Capital cost estimate of US$106m (excluding contingency), based on owner operated mining;
Strong opportunity to reduce both operating expenditure and capital expenditure during the BFS;
IRR of 58 % (pre-tax); and
NPV of US$626m (pre-tax) at a 10% discount rate.

General

The scoping study is based on the JORC Inferred Resource quoted for the Kanzi deposit. Minbos anticipates the release of an upgraded resource for Kanzi early 2013 which will provide the basis for the BFS.

Mining

Coffey Mining (“ Coffey ”) was commissioned to conduct an evaluation of the viability of mining a high grade portion of the Kanzi deposit.

Minbos has identified the Kanzi project area, a 26.07Mt “pitable” resource for development identified three mining areas in the Kanzi mineral resource block to be used for mine design purposes. Coffey has applied a 5% mining loss to the mineral resources as well as a 5% dilution factor. Coffey Mining has assumed all dilution to have zero P2O5 content, albeit some of the dilution will contain P2O5.

The Coffey report concluded that using a truck and shovel approach, the high grade portion of the Kanzi deposit could be mined at a 1.65Mtpa of Run of Mine (“ ROM ”) at a strip ratio of 7.1:1 (waste to ROM). This will produce 1.0Mtpa of phosphate rock, at an average grade of 32% P2O5, with a recovery of 60%.

4 4 Amounts quoted are for 100% of the project.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

The economic evaluation was based on the mining equipment being purchased and operated by the Owner. Coffey has also made allowances for replacement capital of US$16.27m (excluding contingency) during the 17 year LOM.

Coffey has derived mining costs from its experience in West African mining projects. The capital cost (“Capex”) and operating costs (“Opex”) are:

Initial Capex US$14.24m (excluding contingency);
Additional equipment purchases of $8.2m in years 2 and 4 to bring Kanzi into full production; and
Average Opex US$13.45/t phosphate rock produced.

Processing

Set Point Laboratories was commissioned to conduct an initial beneficiation testwork program on 6 composite samples (KZ1 – KZ6).

The testwork concluded that the preferred processing route for the high grade portion of the Kanzi deposit is a basic scrubbing and selective screening operation, which by its nature is a low energy consumer and is operator friendly.

The processing route is as follows:

ROM is attrition scrubbed to remove lumps and clay agglomerates;
Attrition scrubber discharges over a de-sliming screen;
The screen undersize is further de-slimed and the oversize is discarded;
The phosphate rock concentrate is de-watered in a vacuum belt filter and then passed through a drier to produce a 2 - 3% moisture content phosphate rock; and
The concentrate grade is expected, based on the testwork, to be similar to Moroccan benchmark grade of 31 - 33% P2O5.

Capex and Opex have been derived from first principals based on the beneficiation testwork and the infrastructure requirements of the Kanzi Project. Certain costs, where applicable, were factored from costs in the Cacata scoping study. The Capex and Opex are:

Capex: US$50.58m (excluding contingency); and
Opex: US$24.59/t of phosphate rock produced.

Tailings Storage Facility

The Tailings Storage Facility (“TSF”) is based on the Cacata TSF design done by SRK. SRK derived costs assessed on their internal database and experience in West African mining projects. The Capex and Opex are:

Capex: US$9.7m (excluding contingency); and
Opex: US$0.50/t of phosphate rock produced.

Phosphate Rock Logistics

The Capex and Opex are based on the Cacata Scoping Study and have been specifically adjusted to suit the Kanzi Project infrastructure and logistics requirements.

The logistics include the transporting by road and ship loading of 1.0Mtpa of phosphate rock from the Kanzi processing plant 35km by existing road to the operating port of Boma. 6 June

Capex: US$17.6m (excluding contingency); and
Opex: US$3.25/t of phosphate rock produced.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Infrastructure

The following infrastructure has been provided for in the Capex:

Offices;
Power generation by diesel generators;
Water reticulation;
Housing recreation and messing facilities;
Workshops for mining, processing and phosphate rock logistics;
Security and fencing;
Firefighting;
Change houses;
Sewerage disposal;
Communications, IT; and
Bulk fuel storage.

Capital Cost

The Capex has been estimated at US$106m (excluding contingency) as detailed below:

Table 7 – Capital Expenditure Table

	Kanzi Project Scoping Study Capex Summary	Kanzi Project Scoping Study Capex Summary
		CAPEX
Description		Total US$m
Mining Process Plant Tailings Dam Project Logistics Project Management Relocation of Village Contingency		$14.2 $50.6 $9.7 $17.6 $3.9 $10.0 $16.7

TOTAL CAPEX		$122.7

The capital cost estimate includes the purchase of the mining fleet. This could potentially be reduced by approximately US$14m by out sourcing the mining to a contractor.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Operating Cost

The Opex has been estimated at US$56.19/t FOB Boma of phosphate rock as follows:

Table 8 – Operating Expenditure Table

	Kanzi Project Scoping Study Opex Summary	Kanzi Project Scoping Study Opex Summary

		OPEX
Description		Total US$/t FOB
Mining Project Logistics Beneficiation Tailings Dam G and A Royalties		$13.45 $3.25 $24.59 $0.50 $9.00 $5.40
OPEX PER TONNE PRODUCT		$56.19

Marketing and Product Pricing

At the target production rate of 1Mtpa of phosphate rock product, the Kanzi Project currently has a 17-year life of mine. Current market analysis shows that this product will be in demand and readily absorbed by the market. Our base case analysis has assumed a selling price of US$180/t FOB Boma.

Financial Model

The results of the cash flow model developed from the scoping study are as follows:

Table 9 – Cash Flow

BASE CASE INVESTMENT BENCHMARK
Cash on Cash Yield	%	1454
Payback Period	Years	1.66
IRR (pre tax)	%	58
Net Present Value @ discount rate of 10% (pre tax)	US$m	625.98

The cash flow model is a base case scenario and does not take into account the potential upside as a result of contracting out all or part of operations and has been prepared on a pre-funding and EBITDA basis.

Kanzi is an important project for Minbos and a key building block for the Company in achieving its goal of becoming a low capex and opex phosphate rock producer and exporter.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

(c) Kanzi Development Program

Minbos remains focused on ‘fast-tracking’ the development of the Kanzi Project, particularly given its relatively high grade and access to road and port infrastructure.

A summary of the work program is shown below:

Exploration and Drilling

(a) Aircore Drilling
i. Wallis Drilling completed an aircore drilling program in November 2012.
ii. The immediate priority was to carry out infill drilling in the high grade areas to upgrade the current Inferred Mineral Resources to Indicated – which will provide the basis for the commencement of the BFS on the project.
iii. This resource upgrade is expected to be completed by mid-April 2013.

Feasibility Study

(b) Bankable Feasibility Study
iv. Based on the similarities of the Kanzi and Cacata projects (grade, size, location and access to infrastructure) and the very robust financials results recently published from the Kanzi scoping study, Minbos will proceed with a BFS and is issuing scopes to consultants for completion of the study.

Exploration Upside

After the commencement of the Kanzi BFS, Minbos will start evaluating the potential of the regional exploration concessions held by the JV.

Historical exploration work has identified various zones of mineralisation at additional deposits throughout the licence areas. Outside the current resources at Kanzi, there exists significant exploration upside at Kanzi and Fundu-Nzobe. For example, Fundu-Nzobe (tenements 12905, 12913 and 12909) contains a historical (non-JORC) inventory of 70Mt @ 15% P2O5, including of 14Mt @ 19.5% P2O5.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

Figure 8 – DRC Licences

==> picture [377 x 532] intentionally omitted <==

Competent Persons Statement

Ms Kathleen Body

The information in this report has been reviewed and approved for release by Ms Kathleen Body, Pr.Sci.Nat, who has over 17 years’ experience in mineral exploration and mineral resource estimation. Ms Body is a Principal Consultant and full-time employee of Coffey Mining (South Africa) (Pty) Ltd and contracted to MINBOS. She has sufficient experience in relation to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined by the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (The JORC Code 2004 Edition). Ms Body has consented to inclusion of this information in the form and context in which it appears.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Review of Operations

3. DINGE POTASH LICENCE

During September 2011, the Company entered into an agreement, subject to technical and legal due diligence, to acquire 75% of the Dinge potash licence from Alum Industrial Lda (“Alum”), a private Angolan mineral exploration company.

Following due diligence, the Company has discontinued further investigation of its Dinge Potash Licence program to focus the Company’s future activities and resources on the development of its phosphate assets.

(c) CORPORATE

Strategic Partner

During the Period, the Company commenced a strategic partner tender process. The initial phase of the tender process resulted in a high level of interest from potential strategic partners, particularly from major downstream fertiliser producers and trading companies across Asia and Europe.

Several indicative offers were received to provide funding to complete bankable feasibility studies to enable Minbos to advance its Angolan and DRC phosphate rock projects towards development and to provide long term phosphate off-take agreements for its projects. Due diligence and site inspections have commenced under confidentiality agreements for each of these potential partners.

Senior Executive Appointments

During the Period, Minbos appointed Mr Scott Sullivan as Managing Director (“MD”) and Mr James Carter as Chief Financial Officer (“CFO”).

Scott brings over 25 years of diversified mining experience to Minbos, across multiple commodities and projects domestically and internationally. His experience spans strategic planning in mines and smelters; feasibilities; commissioning; mine expansion and restructuring; mine, port and rail infrastructure; project management; sustainability and government. Prior to joining Minbos, Scott held the position of President of NSW Energy Coal with BHP Billiton.

James is a CPA and Chartered Secretary with 17 years’ experience in the mining industry. He was previously CFO of Straits Resources, a diversified metals group listed on the ASX. Prior to this, James was CFO and Company Secretary of SGX listed Sakari Resources and was integral to its listing and development as a 10 million tonne per annum coal producer in Indonesia. His experience spans numerous equity and debt capital market raisings, mergers/ acquisitions work and corporate governance experience.

Mr Peter Richards transitioned from Executive Chairman to Non-Executive Chairman to continue to guide the Company in its development.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Directors’ Report

The Directors submit their half year report of the “Consolidated entity” or “Group”, being Minbos Resources Limited (“Minbos” or “the Company”) and its Controlled entities, for the half year ended 31 December 2012 (“Period”).

1. BOARD OF DIRECTORS

The Directors of the Company at any time during or since the end of the Period are as follows.

Director/Position Duration of Appointment	Director/Position Duration of Appointment
Mr Scott Sullivan – Managing Director (1)	Appointed 2 November 2012
Mr Peter Richards – Executive Chairman	Appointed 16 June 2010, Resigned 2 November 2012
Mr Peter Richards – Non-Executive Chairman	Appointed 2 November 2012
Mr David Reeves – Non-Executive Director	Appointed 20 July 2010
Mr John Ciganek – Non Executive Director	Appointed 16 June 2010
Mr Domingoes Catulichi – Non-Executive Director	Appointed 20 July 2010

(1)Refer to the Review of Operations section c) Corporate; Senior Executive Appointments for further detail.

2. CHIEF FINANCIAL OFFICER

On 2 November 2012 the Company appointed Mr James Carter as Chief Financial Officer. Refer to the Review of Operations section c) Corporate; Senior Executive Appointments for further detail.

3. COMPANY SECRETARY

The Company Secretary is Tanya Woolley.

4. PRINCIPAL ACTIVITIES

Minbos Resources Limited is an exploration company focused on the development of phosphate bearing ore within the Cabinda Province of Angola and the adjoining areas of the far western DRC.

5. FINANCIAL RESULTS

The financial results of the Group for the half year ended 31 December 2012 are:

	31-Dec-12	30-Jun-12
Cash and cash equivalents ($) Net assets($)	1,030,876 10,943,372	2,081,985 12,618,009

	31-Dec-12	31-Dec-11
Revenue ($) Net loss after tax ($) Loss per share (cents) Dividend($)	15,890 (3,814,557) (0.03) -	135,072 (5,305,254) (0.08) -

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Directors’ Report

6. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

On 1 August 2012 the Company announced the signing of a Joint Venture agreement with Allamanda Trading SPRL (“Allamanda”) for the exploration and development of the Kanzi project and surrounding exploration areas in the western Democratic Republic of Congo (“DRC”). In order to earn a 65% interest in the joint venture, Minbos has issued 2,600,000 shares, paid a fee of USD$162,500 and provided initial funding of USD$600,000 for the incorporation of Phosphalux. In addition, it will pay a sales revenue royalty of 3% to Allamanda who will in turn be responsible for any government royalty payments and will pay a once off fee in 12 months of USD$0.05 per tonne of contained phosphate for Indicated Resources grading greater than 20% P2O5 capped at a maximum of USD$1,000,000.

On 2 November 2012 the Company announced the appointment of Scott Sullivan as Managing Director and James Carter as Chief Financial Officer. The Company also announced that Peter Richards would transition from Executive Chairman to Non-Executive Chairman.

On 13 November 2012 the Company completed a book build for a Share Placement to professional and sophisticated investors to raise $1.71 million to finalise the measured and indicated resource drilling program at the high grade Kanzi deposit and to progress the bankable feasibility studies on both high grade Cacata and Kanzi deposits. The Company placed 6,275,717 fully paid ordinary shares at $0.14 per share to raise $878,600 as part of Tranche 1 and 5,949,709 fully paid ordinary shares at $0.14 per share to raise $832,959 as part of Tranche 2.

7. SUBSEQUENT EVENTS

On 8 March 2013, the Company announced that it had entered into a funding agreement with Lind Partners, LLC, the manager of the Australian Special Opportunity Fund, LP (together “Lind”), initially for a $300,000 convertible security and $75,000 as a prepayment for ordinary shares in Minbos. Lind will further invest from $75,000 to $200,000 in monthly subscriptions, subject to conditions, over the next two years, for a maximum facility of $4,975,000. Generally, the conversion price for the monthly subscription amount will be a price 91% of the average of three consecutive Volume Weighted Average Price (VWAP) selected during the 20 consecutive trading days immediately prior to the conversion date which is 28 days from the date that funds were advanced, with a minimum price of 4.5 cents.

On 8 March 2013, the Company also announced that David Reeves (Minbos Non-Executive Director) and James Carter (Minbos Chief Financial Officer) have agreed to provide the Company with $500,000 under a convertible note facility. The conversion price of each convertible note will be at a premium of 50% to the 20 day volume weighted average price (VWAP) of Minbos shares prior to the date of execution of the facility agreement. Interest is payable at a rate of 12% per annum with principal repayment or conversion in 9 months from the date of first drawdown. The conversion of the convertible note issued to David Reeves will be subject to the receipt of Shareholder approval in general meeting.

On 14 March 2013, at a general meeting of the Company, shareholders gave approval for the adoption of the Minbos Resources Limited Employee Share Plan. Shareholders also gave approval for the issue of 6,000,000 shares to Scott Sullivan under the employee share plan. For further terms and conditions of the employee share plan please refer to the notice of meeting announced on 12 February 2013.

There have not been any significant events, other than those stated above, that have arisen since 31 December 2012 and up to the date of this report that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Directors’ Report

8. CORPORATE STRUCTURE

Minbos Resources Limited is a Company limited by shares that is incorporated and domiciled in Australia. The Company is listed on the Australian Securities Exchange under code MNB and whose shares are publicly traded on the Australian Securities Exchange Limited. An overview of the ownership structure for Minbos Resources Limited is shown below:

==> picture [444 x 318] intentionally omitted <==

----- Start of picture text -----

Minbos Resources Ltd
Mongo Tando Allamanda
Holdings
Trading Ltd
(subsidiary of
(BVI)
LR-Group Tunan Mining Ltd (BVI) (Project License
Limited) Holder)
50%
50% 100% 100% 100% 100%
Mongo Tando Tunan Mining SOFOSA RDC Phosphate Agrim SPRL
Limited Pty Ltd (SA) (ANG) SPRL ( DRC) (DRC)
(BVI)
65% 35%
100%
Phosphalux SPRL
Mongo Tando Ltda (DRC)
(Angola) "Phosphalux JV"
(Project License Holder)
"CabindaPhosphate Project" "Kanzi Project"
----- End of picture text -----

KEY:

DRC Incorporated in the Democratic Republic of Congo.

ANG Incorporated in Angola.

BVI Incorporated in the British Virgin Isles.

SA Incorporated in South Africa. Refers to the Project area and its licences

Refers to Minbos Resources Limited and its Controlled entities.

Refers to third-parties that have part ownership with Minbos or one of its controlled entities in a joint venture company that holds the project licence/s.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Directors’ Report

9. LEAD AUDITOR’S INDEPENDENCE DECLARATION

The Lead Auditor’s Independence Declaration is set out on page 29 and forms part of the Directors’ Report for the half year ended 31 December 2012.

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

==> picture [96 x 40] intentionally omitted <==

Peter Richards Non-Executive Chairman Perth, 14 March 2013

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38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au

==> picture [77 x 30] intentionally omitted <==

14 March 2013

The Directors Minbos Resources Limited 108 Outram Street WEST PERTH WA 6005

Dear Sirs,

DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF MINBOS RESOURCES LIMITED

As lead auditor for the review of Minbos Resources Limited for the half-year ended 31 December 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 relation to the review; and
no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Minbos Resources Limited and the entities it controlled during the period.

==> picture [131 x 49] intentionally omitted <==

Phillip Murdoch Director

BDO Audit (WA) Pty Ltd

Perth, Western Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Consolidated Statement of Profit or Loss & Other Comprehensive Income

Revenue from continuing operations Share-based payments Personnel expenses Administration fees Foreign exchange (loss) / gain Finance costs Impairment of exploration and evaluation expenditure Share of net loss from associate Loss from continuing operations before income tax Income tax benefit Loss from continuing operations after income tax Other comprehensive income Exchange differences on translation of foreign operation Other comprehensive loss for the year, net of tax Total comprehensive loss for the year Loss for the year is attributable to the owners of Minbos Resources Limited Total comprehensive loss for the year is attributable to the owners of Minbos Resources Limited Loss per share attributable to ordinary equity holders - Basic loss per share - Diluted loss per share	Notes	31-Dec-12 31-Dec-11 $ $
		15,890 135,072 (56,033) - (321,724) (364,742) (1,017,325) (863,959) (237,567) 519,574 (13,940) - (2,176,908) (6,593,431) (6,950) (86,846)
	6 5
		(3,814,557) (7,254,332) - 1,949,078
		(3,814,557) (5,305,254)
		(78,358) (13,962)
		(78,358) (13,962)
		(3,892,915) (5,319,216)
		(3,814,557) (5,305,254)

		(3,892,915) (5,319,216)
		(0.03) (0.08) (0.03) (0.08)

The consolidated statement of profit or loss & other comprehensive income is to be read in conjunction with the accompanying notes.

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Minbos Resources Limited – Half Year Report As at 31 December 2012

Consolidated Statement of Financial Position

ASSETS Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Property, plant & equipment Investments in associate Other financial assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Provisions Total current liabilities Non-current liabilities Deferred tax liabilities Total non-current liabilities Total liabilities Net assets EQUITY Contributed Equity Reserves Accumulated losses Total equity	Notes	31-Dec-12 30-Jun-12 $ $
		1,030,876 2,081,985 324,762 329,089
	4 5 7 8 9
		1,355,638 2,411,074
		180,304 182,929 9,671,903 9,913,687 4,213,808 4,149,762
		14,066,015 14,246,378
		15,421,653 16,657,452
		538,787 92,398 3,85711,408
		542,644 103,806
		3,935,637 3,935,637
		3,935,637 3,935,637
		4,478,281 4,039,443
		10,943,372 12,618,009
		25,070,104 22,907,859 1,112,088 1,134,413 (15,238,820) (11,424,263)

		10,943,372 12,618,009

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Consolidated Statement of Changes in Equity

At 1 July 2012 Comprehensive income: Loss for the period Other comprehensive loss for the period Total comprehensive loss for the period Transactions with owners in their capacity as owners: Issue of share capital Capital raising costs Share-based payments At 31 December 2012 As 1 July 2011 Comprehensive income: Loss for the period Other comprehensive loss for the period Total comprehensive loss for the period Transactions with owners in their capacity as owners: Issue of share capital Capital raising costs Share-based payments At 31 December 2011	Contributed Equity Share-based Payment Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity $ $ $ $ $
	22,907,859 1,170,882 (36,469) (11,424,263) 12,618,009
	- - - (3,814,557) (3,814,557) - - (78,358) - (78,358)
	- - (78,358) (3,814,557) (3,892,915) 2,309,560 - - - 2,309,560 (147,315) - - - (147,315) - 56,033 - - 56,033
	25,070,104 1,226,915 (114,827) (15,238,820) 10,943,372
	Contributed Equity Share-based Payment Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity $ $ $ $ $
	18,344,500 613,563 114,240 (4,499,728) 14,572,575

	- - - (5,305,254) (5,305,254) - - (13,962) - (13,962)
	- - (13,962) (5,305,254) (5,319,216) 4,879,350 - - - 4,879,350 (315,991) - - - (315,991) - 142,295 - - 142,295
	22,907,859 755,858 100,278 (9,804,982) 13,959,013

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Consolidated Statement of Cash Flows

Cash flows from operating activities Payment to suppliers and employees Interest received Interest paid Net cash outflow from operating activities Cash flows from investing activities Payment for plant and equipment Payment for exploration and evaluation expenditure Net cash outflow from investing activities Cash flows from financing activities Proceeds from the issue of shares, net of issue costs Loan to associate Net cash inflow from financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effect of exchange rate fluctuations on cash held Cash and cash equivalents at the end of the period	31-Dec-12 31-Dec-11 $ $
	(1,206,979) (1,434,587) 15,890 66,513 (90) -
	(1,191,179) (1,368,074)
	(28,570) - (1,254,222) (198,274)
	(1,282,792) (198,274)
	1,564,245 4,563,359 (64,046) (1,465,329)
	1,500,199 3,098,030

	(973,772) 1,531,682
	2,081,985 3,254,882 (77,336) -
	1,030,876 4,786,564

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Notes to the Consolidated Financial Statements

1. REPORTING ENTITY

Minbos Resources Limited (referred to as ‘Minbos’ or the ‘Company’ or Parent Entity’) is a company domiciled in Australia. The address of the Company’s registered office is 108 Outram Street, West Perth, WA 6005. The address of the Company’s representative office in Johannesburg is 42 Kyalami Boulevard, Kyalami Business Park, Kyalami, Johannesburg, South Africa. The consolidated financial statements of the Company as at and for the half year ended 31 December 2012 (the “Period”) comprise the Company and its subsidiaries (together referred to as the ‘consolidated entity’ or the ‘Group’). The Group is primarily involved in phosphate exploration in Africa.

The financial report of Minbos Resources Limited for the Period was authorised for issue in accordance with a resolution of the directors on 14 March 2013.

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES

Basis of compliance

This general purpose condensed financial report of the Company for the Period has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001 . Compliance with AASB 134 ensures compliance with International Financial Standard IAS 34 Interim Financial Reporting .

The half year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Company as the full financial report.

It is recommended that the half year financial report be read in conjunction with the annual financial statements for the year ended 30 June 2012 and considered together with any public announcements made by the Company during the Period and up to the date of this report in accordance with the continuous disclosure obligations of the ASX Listing Rules.

Summary of Significant Accounting Policies

The significant accounting policies adopted in the preparation of the historical financial information included in this report have been set out below.

(a) Basis of preparation

The condensed financial statements have been prepared on the basis of historical cost. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars.

The accounting policies and methods of computation adopted in the preparation of this financial report for the Period under review are consistent with those adopted in the annual financial statements for the year ended 30 June 2012.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Notes to the Consolidated Financial Statements

(b) Going Concern

The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

During the year the consolidated entity incurred a net loss of for the half year of ($3,814,557) and incurred net cash outflows from operating and investing activities of ($2,473,971).

The ability of the consolidated entity to continue as a going concern is dependent on the consolidated entity being able to raise additional funds as required to conduct a bankable feasibility study on its projects, fund ongoing exploration commitments and for working capital. The Directors believe that they will be able to raise additional capital as required and are in the process of evaluating the consolidated entity’s cash requirements.

On 8 March 2013, the consolidated entity announced that it had entered into a funding agreement with Lind Partners, LLC, initially for a $300,000 convertible security and $75,000 as a prepayment for ordinary shares in Minbos. Lind will further invest from $75,000 to $200,000 in monthly subscriptions, subject to conditions, over the next two years, for a maximum facility of $4,975,000.

The Directors believe that the consolidated entity will continue as a going concern. As a result the financial report has been prepared on a going concern basis. No adjustments have been made relating to the recoverability of assets and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

(c) Impact of standards issued but not yet applied by the entity

Other than AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle there were no new standards issued since 30 June 2012 that have not been applied by Minbos Resources Limited.

The 30 June 2012 annual report disclosed that Minbos Resources Limited anticipated no material impacts (amounts recognised and/or disclosed) arising from initial application of these standards issued but not yet applied, and this remains the assessment as at 31 December 2012.

3. SEGMENT INFORMATION

The Group operates only in one reportable segment being predominately in the area of phosphate mineral exploration in the DRC and Angola, within Africa. The Board considers its business operations in phosphate mineral exploration to be its primary reporting function. Results are analysed as a whole by the chief operating decision maker, this being the Board of Directors. Consequently revenue, profit, net assets and total assets for the operating segment are reflected in this financial report.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Notes to the Consolidated Financial Statements

4. TRADE AND OTHER RECEIVABLES

4. TRADE AND OTHER RECEIVABLES
Trade receivables (a) Other costs receivables (b) Taxes receivable Accrued interest Prepayments Deposits	31-Dec-12 30-Jun-12
	$ $ 61,721 106,782 146,229 129,024 33,647 17,058 456 2,071 69,695 71,153 13,014 3,001
	324,762 329,089

(a) Trade receivables

Trade receivables relate to transactions with African Arch, a Company who provided a sub-lease for the previous Johannesburg office (30 June 2012: $91,974).

In the current reporting period the Company formed a binding loan agreement to secure the repayment of these funds. For further detail refer to note 4 (b).

(b) Other costs receivables

Other costs receivables relate to employee advances at the subsidiary level. Of this amount receivable at reporting date, $130,873 relates to advances to former CEO, Robbie McCrae (30 June 2012: $78,058) and $8,741 relates to advances to Non-Executive Director, Domingoes Catulichi (30 June 2012: $9,106).

During the Period, a binding loan agreement was formalised between Robbie McCrae and the Company, whereby JCJ Investments SA (‘JCJ’), a Company which held shares on trust for Mr McCrae, agrees to guarantee the repayment of the advances and trade receivable noted above in part (a). The balances are to be repaid in full by 31 May 2013 (unless extended by mutual agreement). If the balance is not repaid by this date then the interest will accrue at a rate of 12% per annum. The Company has placed 1,500,000 shares held by JCJ into holding lock, which will be used as security until the loan is repaid.

5. INVESTMENT IN ASSOCIATE

As part of the acquisition of Tunan Mining Limited, Minbos acquired a 50% interest in Mongo Tando Limited BVI, a company incorporated in the British Virgin Isles. By virtue of holding less than 50% of the voting rights the entity has been accounted for as an investment in an associate.

Carrying amount of the investment in associate Movement reconciliation Balance at the beginning of the period Foreign exchange translation Share of loss in associate Balance at the end of the period	31-Dec-12 30-Jun-12
	$ $ 9,671,903 9,913,686
	9,913,686 9,512,493 (234,833) 567,449 (6,950) (166,255)
	9,671,903 9,913,686

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Notes to the Consolidated Financial Statements

6. EXPLORATION AND EVALUATION EXPENDITURE

6. EXPLORATION AND EVALUATION EXPENDITURE
Carrying amount of exploration and evaluation expenditure Movement reconciliation Balance at the beginning of the period Acquisition (i) Additions Foreign exchange translation Impairment of exploration and evaluation expenditure (ii) Balance at the end of the period	31-Dec-12 30-Jun-12
	$ $ - -
	- 6,168,652 785,914 - 1,390,994 621,200 - (46,653) (2,176,908) (6,743,199)
	- -

(i) On 1 August 2012 the Company announced the signing of a Joint Venture agreement with Allamanda Trading SPRL (“Allamanda”) for the exploration and development of the Kanzi project and surrounding exploration areas in the western Democratic Republic of Congo (“DRC”). In order to earn a 65% interest in the joint venture entity, Phosphalux SPRL, Minbos has provided initial funding of USD$600,000 for the incorporation of Phosphalux SPRL. Minbos has issued 2,600,000 shares and paid a fee of USD$162,500 to consultants who facilitated the agreement.
(ii) Subsequent to the end of the Period, during February 2013, Minbos was presented with a side agreement by Allamanda that was purportedly entered into concurrently with the signing of the original JV agreement by Agrim, without the knowledge or consent of the Board of Directors of the Company, which seeks to apportion Minbos a 49% interest in the economic benefit of the Licences which form the Kanzi project, with a 51% economic interest held by Allamanda.

The Company has obtained preliminary legal advice in relation to the validity of this side agreement because it was executed without proper authority from the Board of Minbos. The advice has confirmed that the side agreement is open to legal challenge. The Directors are considering the Company’s options in relation to any damages, if any, owed to it in relation to this matter and believe it has accurately reflected the impact of this matter in the financial statements. Minbos is actively engaging with Allamanda to resolve this issue in a positive manner.

At 31 December 2012, Allamanda continued to hold the Kanzi Joint Venture licences, accordingly the Group has impaired the exploration expenditure incurred during the period until the licences are transferred to the Joint Venture entity.

7. OTHER FINANCIAL ASSETS

7. OTHER FINANCIAL ASSETS
Loan to Mongo Tando Limited	31-Dec-12 30-Jun-12
	$ $ 4,213,808 4,149,762
	4,213,808 4,149,762

The loans to Mongo Tando Limited (the “Associate”) are unsecured interest-free loans for the purpose of obtaining the required working capital for the establishment and ongoing operation of the Project in Angola. LR Group, the ultimate 50% holder in the Associate, along with Minbos’ ultimate 50% holding in the Associate, each contribute in equal portions loans receivable.

The Group anticipates full repayment of these loans or alternatively part payment with the balance being converted into equal shareholder equity.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Notes to the Consolidated Financial Statements

8. CONTRIBUTED EQUITY

(a) Issued and fully paid

(a) Issued and fully paid
Ordinary shares Performance shares	30-Jun-12 31-Dec-12
	$ No. $ No.
	23,070,104 125,501,676 20,907,859 110,676,250 2,000,000 10,000,000 2,000,000 10,000,000
	25,070,104 135,501,676 22,907,859 120,676,250

(b) Movement reconciliation

ORDINARY SHARES	Date	Quantity	Issueprice	$
Balance 30 June 2012		110,676,250		20,907,859
Issue of shares to inter alliance (i)	17/08/2012	2,600,000	0.23	598,000
Placement - Tranche 1 (ii)	16/11/2012	6,275,718	0.14	878,601
Placement - Tranche 2 (iii)	19/11/2012	5,949,708	0.14	832,959
Share raising costs				(147,315)
Balance 31 December 2012		125,501,676		23,070,104

(i) On 17 August 2012 the Company issued 2,600,000 shares to the facilitators of the Kanzi Joint Venture agreement.
(ii) On 16 November 2012 the Company placed 6,275,718 fully paid ordinary shares at $0.14 per share to raise $878,601 from sophisticated investors, known as Tranche 1.
(iii) On 19 November 2012 the Company placed 5,949,708 fully paid ordinary shares at $0.14 per share to raise $832,959 from sophisticated investors, known as Tranche 2.

PERFORMANCE SHARES	Date	Quantity	Issueprice	$
Balance 30 June 2012		10,000,000		2,000,000
Performance B Shares (i)	18/10/2012	(10,000,000)	0.20	(2,000,000)
Performance C Shares(ii)	22/11/2012	10,000,000	0.20	2,000,000
Balance 31 December 2012		10,000,000		2,000,000

(i) Class B Performance Shares expired on 18 October 2012. The Company however agreed to extend the period by which the Milestone can be achieved as there were significant delays in the Company getting access to the licences as a result of issues with the government of the Democratic Republic of Congo. The Company however was unable to vary the existing terms of the Class B Performance Shares as the Annual General Meeting did not occur prior to the expiry. The Company therefore issued new Class C Performance Shares to the Vendors (noted below).
(ii) Class C Performance Shares shall convert to ordinary shares upon delineation of a JORC compliant indicated resource at the Kanzi project of greater than 25 million tonnes at an average in-situ grade of greater than 12.5% on the area covered by licences specified in the Heads of Agreement with Tunan Mining Limited, on or before 18 April 2013.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Notes to the Consolidated Financial Statements

9. RESERVES

9. RESERVES
Share-based payments reserve	31-Dec-12 30-Jun-12
	$ $ 1,226,915 1,170,882
Foreign currency translation reserve	(114,827) (36,469)
	1,112,088 1,134,413

Movement reconciliation
Share-based payments reserve Balance at the beginning of the period	1,170,882 613,563
Equity settled share-based payment transactions	56,033 557,319
Balance at the end of the period Foreign currency translation reserve	1,226,915 1,170,882

Balance at the beginning of the period	(36,469) 114,240
Effect of translation of foreign currency operations to group presentation currency	(78,358) (150,709)
Balance at the end of the period	(114,827) (36,469)

10. DIVIDENDS

No dividends have been paid or declared since the start of the financial period, and none are recommended.

11. COMMITMENTS

There are no new commitments, other than the commitments that existed as at 30 June 2012, that the Company has entered into during the period under review.

12. CONTINGENCIES

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

13. SUBSEQUENT EVENTS

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Notes to the Consolidated Financial Statements

14. RELATED PARTIES

(a) Material contracts with related parties

– Consultancy Mandate Everspring Partners

On 4 of July 2012 Minbos signed a consultancy mandate with Everspring Partners to identify, tender and secure a potential strategic investor. John Ciganek, non-executive director of Minbos, is a partner of Everspring Partners.

The Company has agreed to pay Everspring Partners according to the following arrangement:

Monthly retainer fee – A$10,000 per month (exclusive of GST); and
Success fee – payable by Minbos to Everspring equal to 3% of any investment (“strategic Interest”) in Minbos either at the corporate level, project level and/or off take agreement value, which will be payable at financial close.

The mandate may be terminated by either party at any time upon written advice. In the event of termination by Minbos, Everspring Partners will be entitled to its full success fee, at any time within the 12 months following such termination, in the event that Everspring Partners previously introduced a strategic Investor that ultimately secures a Strategic Interest in Minbos.

Under this agreement, Everspring Partners received fees totalling $60,000 during the period. There are no further amounts outstanding at year end.

There are no other material changes to transactions with related parties from those disclosed in the 30 June 2012 Annual Report.

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Minbos Resources Limited – Half Year Report For the period ended 31 December 2012

Directors’ Declaration

The Directors of the company declare that:

(a) The financial statements and notes of the Company are in accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of the financial position as at 31 December 2012 and the performance for the half year ended 31 December 2012.
(ii) Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 and other mandatory reporting requirements.
(b) 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 and is signed on behalf of the Directors by:

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Peter Richards Non-Executive Chairman Perth, 14 March 2013

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Tel: +8 6382 4600 38 Station Street Fax: +8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF MINBOS RESOURCES LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Minbos Resources Limited, which comprises the consolidated statement of financial position as at 31 December 2012, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the disclosing entity are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 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 Minbos Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Minbos Resources Limited, would be in the same terms if given to the directors as at the time of this auditor’s review report.

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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 Minbos Resources Limited is not in accordance with the Corporations Act 2001 including:

(a) 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
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 .

Emphasis of Matter

Without modifying our conclusion, we draw attention to Note 2 in the half-year financial report which indicates that the consolidated entity incurred a net loss of $3,814,557 and had net operating and investing cash outflows of $2,473,971 during the half-year ended 31 December 2012. These conditions, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

BDO Audit (WA) Pty Ltd

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Phillip Murdoch Director

Perth, Western Australia Dated this 14[th] day of March 2013

AI assistant

MINBOS RESOURCES LIMITED — Interim / Quarterly Report 2013

65355_rns_2013-03-14_83a4cddf-332f-4d5a-abf1-7e7ad0930d76.pdf

Half Year Report

Contents

Corporate Directory

Directors & Officers

Securities Exchange

Share Registry

Solicitors

Auditors

Registered Office

Principal Place of Business

South African Office

Domicile and Country of Incorporation

Australian Company Number

Australian Business Number

Public Relations

Bankers

Review of Operations

GROUP OVERVIEW

(a) Highlights

Review of Operations

Projects

Review of Operations

(b) Resources

1. CABINDA PROJECT

(a) History and Ownership

Review of Operations

 Eastern Limb Deposits

 Western Limb Deposits

Review of Operations

Cacata deposit

Cacata Scoping Study

General

Mining

Processing

Review of Operations

Review of Operations

Tailings Storage Facility

Phosphate Rock Transport and Ship Loading

Review of Operations

Review of Operations

Infrastructure

Review of Operations

Capital Cost

Table 2: Capital Costs

Operating Costs

Review of Operations

Marketing and Product Pricing

Financial Model

Table 4: Financial Model

Review of Operations

Figure 7: Sensitivity Graph

Beneficiation Testwork

Review of Operations

Outlook

(b) Chivovo deposit

(c) Cambota deposit

(d) Future Exploration

Review of Operations

2. DRC PROJECT OVERVIEW

(a) History and Ownership

Review of Operations

(b) Kanzi Deposit

Scoping Study

General

Mining

Review of Operations

Processing

Tailings Storage Facility

Phosphate Rock Logistics

Review of Operations

Infrastructure

Capital Cost

Review of Operations

Operating Cost

Marketing and Product Pricing

Financial Model

Review of Operations

MINBOS RESOURCES LIMITED Interim / Quarterly Report 2013