MINBOS RESOURCES LIMITED - Interim / Quarterly Report 2014

Half Year Report

For the period ended 31 December 2013

==> picture [150 x 148] intentionally omitted <==

ABN 93 141 175 493

1 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Corporate Directory	3
Review of Operations	4
Directors’ Report	20
Lead Auditor’s Independence Declaration	24
Consolidated Statement of Profit or Loss & Other Comprehensive Income	25
Consolidated Statement of Financial Position	26
Consolidated Statement of Changes in Equity	27
Consolidated Statement of Cash Flows	28
Notes to the Consolidated Financial Statements	29
Directors’ Declaration	41
Independent Auditor’s Review Report	42

2 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Corporate Directory

Directors & Officers

Mr Peter Wall - Non-Executive Chairman Mr Damian Black - Executive Director Mr William Oliver - Non-Executive Director Mr Domingos Catulichi - Non-Executive Director

Bankers

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

Ms Paige Exley - Company Secretary

Auditors

Registered Office

C/- Blue Horse Corporate Level 1, 981 Wellington Street West Perth WA 6005

T: +61 (08) 9322 9295 F: +61 (08) 6314 1587 E-mail: [email protected] Website: www.minbos.com

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

Share Registry

Automic Registry Services Level 1, 7 Ventnor Avenue West Perth WA 6005 Website: www.automic.com.au

Principal Place of Business

Perth Office Level 1, 278 Stirling Highway Claremont WA 6010

PO Box 1346 West Perth WA 6872

Solicitors

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

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

Public Relations

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

Securities Exchange

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

Australian Company Number ACN 141 175 493

Australian Business Number

ABN 93 141 175 493

3 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

1. 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 2013 (“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, the adjoining areas of the far western Democratic Republic of the Congo (“DRC”) and minor tenement holdings in Australia. Through its subsidiaries and joint ventures, the Company is developing the high grade Cacata project, seeking to divest its Kanzi project and continuing to explore over 400,000 ha of highly prospective ground hosting phosphate bearing deposits.

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:

Capital Raising – Minbos secured a convertible note facility for up to $800,000 managed and arranged by CPS Capital Group.

Future asset divestment – Minbos signalled its intention to divest its assets in the DRC. To date the Group has completed a Scoping Study which has confirmed positive potential economic returns and has delineated an Indicated Resource of 58.5Mt at 14.2% P2O5, in accordance with JORC guidelines. First Rights of Refusal have been offered to its joint venture partner, Allamanda Trading SPRL. Allamanda have not formally responded on their rights of first refusal but have indicated they are interested in acquiring Minbos’ assets and have engaged in discussions to this end.

Tenement acquisition – Minbos acquired two mining tenements in the Carnarvon Shire of Western Australia which are prospective for phosphate. The Group will commence geological mapping, geochemical sampling and desktop based evaluation activities.

Cabinda resource upgrade – Minbos reported an overall tonnage increase of 87.2Mt which is an increase of 28.7% of the total resources for the Cabinda Project, with contained Phosphate increase of 4.1% overall. Refer below to Table 1 for more information on the Group’s resources.

Performance milestone confirmed – Minbos received the Final Coffey report in relation to the Cabinda resources which confirmed a resource tonnage of 391.3 million tonnes at an average grade of 9.2% which exceeded the conversion factor required for the release of 25,000,000 ordinary shares to the vendors of the Cabinda project, which were voluntarily escrowed pending the final resource results.

Since listing, Minbos has moved from an exploration company to a company that has a key project in development stage plus a substantial resource. This work confirms that Minbos is on track to achieving its goal of becoming a low capex and opex phosphate rock producer and exporter.

4 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

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 in Africa include, as shown in Figure 1 :

Cabinda Phosphate (50% interest) - Includes Cacata, Mongo Tando, Chibuete, Chivovo and Ueca deposits with historical and/or current exploration data.
Western DRC Phosphate (49% interest) - 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.
Western Australia Phosphate (100% interest) – Two mining tenements prospective for phosphate.

Figure 1: Phosphate Projects

==> picture [382 x 509] intentionally omitted <==

5 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

(b) Resources

Minbos has delineated a substantial resource of 449.8Mt @ 9.8% 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	Category	Tonnes (Mt)	Grade (% P2O5)	Cut-Off (% P2O5)
Cabinda, Angola
Cacata	Measured	5.0	23.0	5.0
	Indicated	10.2	25.3	5.0
	Inferred	11.8	8.8	5.0
Mongo Tando	Indicated	24.8	11.5	5.0
	Inferred	184.0	8.0	5.0
Chivovo	Indicated	6.5	20.5	5.0
Chibuete	Inferred	149.0	8.3	5.0
Total		391.3	9.2	5.0
Kanzi, DRC
Kanzi	Indicated	58.5	14.2
Grand Total		449.8	9.9

2. 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 exploration permit validly expired 20 January 2013 and the joint venture has sought renewal of the permit with the Angola Government, which is processing the licence renewal under the new Angolan Mining Code. As at the date of this report the license has not been renewed. The Board has no reason to believe that the licence will not be granted nor that the licence approval process is not progressing. However, there is a risk that the renewal could take additional time or may not be renewed resulting in Minbos not being able to realise the investment at amounts stated in this report.

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.

6 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

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 contain substantial tonnages above 20% P2O5. The Cacata Project is the focus of the exploration activities and is now at the Definitive Feasibility Study phase.

 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

==> picture [409 x 456] intentionally omitted <==

7 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

Cacata deposit

The Cacata deposit lays on the Eastern most boundary of the exploration permit in Cabinda and currently has an Measured Mineral Resource at 5.0Mt @ 23% P2O5 and an Indicated Mineral Resource at 10.2Mt @ 25.3% 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[1] :

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

General

The scoping study is based on the JORC high grade Indicated Mineral Resource announced in April 2012 of the Central and Northern sections of the Cacata deposits and demonstrates the robust nature of the Cacata high grade project.

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 USD $9.5m and
the average mining cost of USD $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.

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 passed through an attrition scrubber to remove lumps and clay agglomerates;
the attrition scrubber discharges over a desliming screen;

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

8 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

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

==> picture [360 x 433] intentionally omitted <==

DRA have derived costs based on their internal data base and experience in African mining projects that:

the capex would be USD $54.8m; and
the operating cost would be USD $25.12/t of phosphate rock recovered.

9 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

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 USD $6.8m; and
the operating cost would be USD $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

==> picture [474 x 222] intentionally omitted <==

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

10 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

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

==> picture [468 x 527] intentionally omitted <==

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 ).

11 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

Figure 6: Bulk Storage and Barge Loading PFD

==> picture [465 x 292] intentionally omitted <==

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;

12 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

change houses;
sewerage disposal;
communications and IT; and
fuel storage.

Capital Cost

The total capital cost has been estimated at USD $157.1m (including EPCM and contingency) as detailed below in Table 2 :

Table 2: Capital Costs

Description	Cost USD$m
Mining	$9.5
Processing Plant	$54.8
Tailings Storage Facility	$6.8
Product Storage & Transport (Land)	$22.5
Product Storage & Loading (Sea)	$57.5
Owners Costs	$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	$5.72
Processing Plant	$25.12
Tailings Storage Facility	$0.50
Product Transport (Land)	$13.63
Product Loading (Sea)	$3.25
General and Administration	$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.

13 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

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[2] 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

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.

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

14 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

Figure 7: Sensitivity Graph

==> picture [461 x 302] intentionally omitted <==

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 2013 financial year, 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%.

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.

15 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

Phosphoric Acid Test Work

During the 2013 financial year the Company engaged leading global fertilizer company Yara to undertake test work to characterise the quality of phosphoric acid and DAP produced from Cacata Phosphate rock.

The test work demonstrated that:

The Cacata phosphate can be successfully processed in the dehydrate phosphoric acid route. The Phosphate rock provided excellent process performance.
The level of Cadmium is similar to that found in other commercial rocks.
Filtration properties of the phosphoric acid slurry were excellent.
Water soluable losses were low, enabling a total P2O5 efficiency in excess of 96% to be achieved, which is at the high end of the normal commercial range.
Concentration of the weak acid to commercial merchant grade 50% P2O5 product was achieved.
DAP production has high values for both N and P2O5 in excess of the internationally accepted standard for DAP 18:46:0

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 additional 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 Indicated resource estimate of 6.5Mt @ 20.5% P2O5.

(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 as 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).

16 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

3. 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.

In 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, which 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 49% interest in 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	South - Covers Kanzi Deposit
12910	Exploration	302	Active	South - Covers Kanzi Deposit
12911	Exploration	375	Active	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

(b) Kanzi Deposit

During the 2013 financial year the Company announced a further upgrade in the resource from Inferred to an Indicated Mineral Resource of 58.5Mt @ 14.2% P2O5. Details are provided in Table 5 below.

Table 5 - Kanzi Project – Total Inferred Resource Estimate

Kanzi Project – Total Indicated Resource	Kanzi Project – Total Indicated Resource
Sample Cut-off grade (P2O5)	Total Tonnes (Million)
		Average P2O5 grade (%)

5%	58.5	14.2%

17 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

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][3]

Operating costs of USD $56.19 per tonne free-on-board (“ FOB ”) of phosphate rock;
Capital cost estimate of USD $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 USD $626m (pre-tax) at a 10% discount rate.

Divestment of DRC Asset

Minbos served a First Right of Refusal notice on its JV partner Allamanda Trading SPRL (Allamanda) on 11 September 2013.

Since that time Minbos has been actively engaging with Allamanda to agree on terms for the sale of its interests in the Kanzi Project. Allamanda has expressed interest in acquiring Minbos’ interests or assets in the project and does not believe Minbos has the right to sell to third parties.

Since entering into negotiations with Allamanda, it has been reported in African Resources Media that the DRC Government has reached agreement with a third party to proceed with the construction of a small fertiliser plant in the DRC and that it intends for this plant to be fed in whole or part by product from the Kanzi Project.

The DRC Government have responded to Minbos’ queries and asserted that no contracts have been committed to regarding the licences with this entity. Minbos asserts that it has the contractual rights to the licences and will progress negotiations with Allamanda to allow an orderly exit for Minbos and the future development of the project by other parties

Allamanda continues to engage Minbos in negotiations to acquire Minbos’ assets. No definitive agreement has been reached at this time.

Competent Person’s Statement Ms Kathleen Body

The information in this report that relates to mineral resources has been reviewed and approved for release by Ms Kathleen Body, Pr.Sci.Nat, who has over 18 years of 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 2012 Edition). Ms Body has consented to inclusion of this information in the form and context in which it appears.

3 4 Amounts quoted are for 100% of the project.

18 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Review of Operations

Figure 8 – DRC Licences

==> picture [340 x 528] intentionally omitted <==

19 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

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 2013 (“Period”).

1. BOARD OF DIRECTORS

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

Directors	Position	Appointment	Resignation
Damian Black	Executive Director	21/02/2014	-
Peter Wall	Non-Executive Chairman	21/02/2014	-
William Oliver	Non-Executive Director	2/09/2013	-
Domingos Catulichi	Non-Executive Director	20/07/2010	-
Scott Sullivan	Managing Director Executive Chairman	2/11/2012 6/08/2013	21/02/2014 21/02/2014
Peter Richards	Non-Executive Chairman	1/11/2012	6/08/2013
David Reeves	Non-Executive Director	20/07/2010	21/02/2014

2. CHIEF FINANCIAL OFFICER

On 30 August 2013 James Carter resigned as Chief Financial Officer. The Company has not appointed a Chief Financial Officer since Mr Carter’s resignation.

3. COMPANY SECRETARY

The Company Secretary is Paige Exley.

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 2013 are:

	31-Dec-13	30-Jun-13	% Change
Cash and cash equivalents ($) Net assets($)	79,632 10,324,121	53,685 10,966,451	48% (6%)

	31-Dec-13	31-Dec-12	% Change
Revenue ($) Net loss after tax ($) Loss per share ($) Dividend($)	1,633 (1,188,490) (0.008) -	15,890 (3,814,557) (0.03) -	(90%) (69%) (75%) -

20 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Directors’ Report

6. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

On 8 July 2013, at the Company’s General Meeting, shareholders approved David Reeves convertible note facility of up to $250,000.

On 6 August 2013, the Company announced the resignation of Peter Richards as Non-Executive Chairman and the appointment of Scott Sullivan as the interim Executive Chairman.

During August 2013, the Company completed financing arrangements with a group of sophisticated investors to provide $250,000 in secured funding through the issue of convertible notes. During the period the convertible note facility was increased to $800,000. The Company received the $675,000 in convertible note funding during the period, which will be used to provide the Company with working capital as it works on longer term funding solutions.

On 2 September 2013, the Company announced the resignation of James Carter as Chief Financial Officer and joint Company Secretary and the appointment of William Oliver as Non-Executive Director.

On 11 September 2013, the Company announced that it had issued 2,000,000 fully paid ordinary shares as consideration for the acquisition of two phosphate tenements in Western Australia.

On 2 October 2013, the Company issued 5,000,000 shares at $0.01 to the Australian Special Opportunity Fund, LP upon conversion of $50,000 of a convertible security.

On 13 October 2013, 14,000,000 unlisted options expired unexercised.

On 25 November 2013, at the Company’s Annual General Meeting, shareholders approved the issue of 5,000,000 options exercisable at 1 cent expiry 30 December 2016 to Mr William Oliver.

On 13 December 2013, the Company issued 12,500,000 shares at $0.004 to the Australian Special Opportunity Fund, LP upon conversion of $50,000 of a convertible security.

7. SUBSEQUENT EVENTS

On 13 January 2014, the Company announced a renounceable entitlement offer of three (3) shares for every seven (7) shares held by shareholders at the record date, 21 January 2014 at an issue price of $0.01 per share to raise up to $1,102,067, together with one free attaching option for every share subscribed.

On 17 January 2014, the Company issued 83,333,333 shares at $0.003 per share and 83,333,333 unlisted options exercisable at $0.01 each, expiring 30 December 2016, on conversion of $250,000 of an $800,000 convertible note facility pursuant to Convertible Note Trust Deed dated 27 August 2013.

On 17 February 2014, the Company announced the cancellation of its pro-rata renounceable rights issue. Despite the Entitlement Offer being fully underwritten by Bethesda Investment Corp and Copper Mining Venture, LDA (underwriters), the underwriters were not able to secure their own financing to fulfil their obligations therefore the Company refunded all application funds received in relation to the Entitlement Offer.

On 21 February 2014, the Company appointed Mr Damian Black as Executive Director and Mr Peter Wall as NonExecutive Chairman following the resignation of Scott Sullivan as Managing Director and Non-Executive Director, David Reeves.

21 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Directors’ Report

The key terms of the settlement deed are that Minbos must repay or assign the current liability of the convertible security of $200,000 and to issue 10,000,000 shares, subject to shareholder approval, in satisfaction of the convertible security and to obtain certain releases under the Principal Agreement.

There have not been any significant events, other than those stated above, that have arisen since 31 December 2013 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.

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 (ASX) under ASX 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 [409 x 312] intentionally omitted <==

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

Minbos Resources Ltd
Mongo Tando Allamanda
Holdings (subsidiary of Mongo Tando Tunan Mining Ltd Trading Ltd (BVI)
LR-Group Limited) Holdings Pty Ltd (BVI) (Project License Holder)
50%
50% 100% 100% 100%
Mongo Tando Tunan Mining SOFOSA Agrim SPRL
Limited (BVI) Pty Ltd (SA) (ANG) (DRC)
49% 51%
100%
Phosphalux SPRL
Mongo Tando Ltda
(DRC)
(Angola)
(Project License Holder) "Phosphalux JV"
"Cabinda Phosphate 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.

22 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Directors’ Report

9. LEAD AUDITOR’S INDEPENDENCE DECLARATION

The Lead Auditor’s Independence Declaration is set out on page 24 and forms part of the Directors’ Report for the half year ended 31 December 2013.

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

==> picture [130 x 58] intentionally omitted <==

Peter Wall Non-Executive Chairman Perth, 14 March 2014

23 | P a g e

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

==> picture [78 x 31] intentionally omitted <==

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 2013, I declare that, to the best of my knowledge and belief, there have been:

no contraventions of the auditor independence requirements of the Corporations Act 2001 in 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 [110 x 41] intentionally omitted <==

Phillip Murdoch

Director

BDO Audit (WA) Pty Ltd

Perth, 14 March 2014

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 2013

Consolidated Statement of Profit or Loss & Other Comprehensive Income

Notes Revenue from continuing operations Share-based payments Personnel expenses Administration expenses Foreign exchange (loss) / gain Finance costs Impairment of exploration and evaluation expenditure 5 Loss from sale of plant and equipment Share of net loss from associate 4 Loss from continuing operations before income tax Income tax benefit Loss from continuing operations after income tax Other comprehensive income Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations Other comprehensive loss for the period, net of tax Total comprehensive loss for the period Loss for the year is attributable to the owners of Minbos Resources Limited Total comprehensive loss for the period 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	31-Dec-13 31-Dec-12
	$
	1,63315,890 (126,017) (56,033) (264,144) (321,724) (448,918) (1,017,325) (511) (237,567) (92,807) (13,940) (115,925) (2,176,908) (18,961) - (122,840) (6,950)
	(1,188,490) (3,814,557) --
	(1,188,490) (3,814,557)
	297,340 (78,358)
	297,340 (78,358)
	(891,150) (3,892,915)
	(1,188,490) (3,814,557)

	(891,150) (3,892,915)
	(0.008) (0.03) (0.008) (0.03)

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

25 | P a g e

Minbos Resources Limited – Half Year Report As at 31 December 2013

Consolidated Statement of Financial Position

Notes ASSETS Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Plant and equipment Investment in associate 4 Exploration and evaluation expenditure 5 Other financial assets 6 Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Provisions Borrowings 7 Derivative financial liabilities 8 Total current liabilities Non-current liabilities Deferred tax liabilities Total non-current liabilities Total liabilities Net assets EQUITY Issued capital 10 Reserves 11 Accumulated losses Total equity	31-Dec-13 30-Jun-13
	$ $
	79,632 53,685 69,239 123,765
	148,871 177,450
	58,260 136,226 11,302,69611,128,980 48,877 - 4,378,1924,213,808
	15,788,025 15,479,014
	15,936,896 15,656,464
	301,225 187,298 25,91317,078 1,307,020318,119 42,980231,881
	1,677,138 754,376
	3,935,6373,935,637
	3,935,6373,935,637
	5,612,775 4,690,013
	10,324,121 10,966,451
	25,563,358 25,440,555 3,105,857 2,682,500 (18,345,094) (17,156,604)
	10,324,121 10,966,451

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

26 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Consolidated Statement of Changes in Equity

At 1 July 2013 Comprehensive income: Loss for the period Other comprehensive income / (loss) Total comprehensive loss for the period Transactions with owners in their capacity as owners: Issue of share capital Capital raising costs Share-based payments Employee benefits expense At 31 December 2013 As 1 July 2012 Comprehensive income: Loss for the period Other comprehensive income / (loss) 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	Issued Capital Share-based Payment Reserve Employee Share Plan Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity $ $ $ $ $ $
	25,440,555 1,269,657 197,889 1,214,954 (17,156,604) 10,966,451
	- - - - (1,188,490) (1,188,490) - - - 297,340 - 297,340
	- - - 297,340 (1,188,490) (891,150) 128,000 - - - - 128,000 (5,197) - - - - (5,197) - - - - - - - 29,886 96,131 - - 126,017
	25,563,358 1,299,543 294,020 1,512,294 (18,345,094) 10,324,121
	Issued Capital Share-based Payment Reserve Employee Share Plan Reserve Foreign Currency Translation Reserve Accumulated Losses Total Equity $ $ $ $ $ $
	22,907,859 1,170,882 - (289,123) (11,129,774) 12,659,844
	- - - - (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 - (367,481) (14,944,331) 10,985,207

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

27 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

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 Proceeds from the sale of plant and equipment 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 Proceeds from convertible note facility, net of costs Net cash inflow from financing activities Net increase / (decrease) 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-13 31-Dec-12
	$ $
	(531,879) (1,206,979) 1,633 15,890 (30,883) (90)
	(561,129) (1,191,179)
	41,687 - - (28,570) (139,057) (1,254,222)
	(97,370) (1,282,792)
	(5,197) 1,564,245 (164,384) (64,046) 854,500 -
	684,919 1,500,199

	26,420 (973,772)
	53,685 2,081,985 (473) (77,336)
	79,632 1,030,877

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

28 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

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 and principal place of business is disclosed in the Corporate Directory of this report. The consolidated financial statements of the Company as at and for the half year ended 31 December 2013 (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 2014.

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 2013 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.

(b) Accounting policies

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 2013, except for the impact of the Standard and Interpretations described below.

AASB 13, Fair Value Measurement

AASB 13 is effective for accounting periods beginning on or after 1 January 2013 and provides guidance on how the measure fair value and enhance fair value disclosure. The application of AASB 13 has not changed the Company’s measurement techniques for determining fair value however it has resulted in the Company providing additional disclosures in respect of the convertible note in Note 9.

29 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

(c) 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 after income tax for the half year of $12,948,990 and incurred net cash outflows from operating and investing activities of $658,499.

The ability of the Consolidated Entity to continue as a going concern is dependent on the Consolidated Entity being able to renew its Cabinda exploration permit and raise additional funds as required to fund ongoing exploration commitments, for working capital and to repay potential liabilities that may arise under the convertible notes. During the period the Company signed a corporate advisory mandate with CPS Capital Group Pty Ltd, to assist and support the Company with a view to raising funds, either through equity or convertible notes. However should the Company be unsuccessful in undertaking additional raisings the Company may not be able to meet its financial obligations. 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.

(d) 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 2013 that have not been applied by Minbos Resources Limited.

The 30 June 2013 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 2013.

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.

30 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

4. INVESTMENT IN ASSOCIATE

As part of the acquisition of Tunan Mining Limited, Minbos acquired a 50% interest in Mongo Tando Limited, 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 Exchange differences Share of net loss in associate Balance at the end of the period	31-Dec-13 30-Jun-13 $ $ 11,302,696 11,128,980 11,128,980 9,955,522 296,556 1,208,829 (122,840) (35,371) 11,302,696 11,128,980

(i) 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 (“Joint Venture”). The Cabinda exploration permit validly expired 20 January 2013 and the Joint Venture has sought renewal of the permit with the Angola Government, which is processing the licence renewal under the new Angolan Mining Code. As at the date of this report the license has not been renewed. The Board has no reason to believe that the permit will not be granted nor that the permit approval process is not progressing. However, there is a risk that the renewal could take additional time or may not be renewed resulting in Minbos not being able to realise the investment at amounts stated in this report.

5. EXPLORATION AND EVALUATION EXPENDITURE

5. EXPLORATION AND EVALUATION EXPENDITURE
Carrying amount of exploration and evaluation expenditure Movement reconciliation Balance at the beginning of the financial year Acquisition (i) Additions Foreign exchange translation Impairment of exploration and evaluation expenditure (ii) Balance at the end of the financial year	31-Dec-13 30-Jun-13
	$ $ 48,877 -
	- - 33,628 891,419 131,174 2,074,885 - - (115,925) (2,966,304)
	48,877 -

(i) During the Period the Company acquired two tenements in the Carnarvon Shire for cash consideration of $5,000 and share consideration of 2 million shares with a deemed value of $28,000.

(ii) At 31 December 2013, 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, Phosphalux SPRL.

31 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

6. OTHER FINANCIAL ASSETS

6. OTHER FINANCIAL ASSETS
Loan to Mongo Tando Limited	31-Dec-13 30-Jun-13
	$ $ 4,378,192 4,213,808
	4,378,192 4,213,808

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.

At 31 December 2013 the Company’s exploration permit held by Mongo Tando Limited had not been renewed, refer Note 4 Investment in Associate. The Board has no reason to believe that the permit will not be granted nor that the permit approval process is not progressing. However, there is a risk that the renewal could take additional time or may not be renewed resulting in Minbos not being able to realise the loan at amounts stated in this report.

7. BORROWINGS

7. BORROWINGS
Convertible note - Lind facility (held at amortised cost) (a) Convertible note - Management (held at amortised cost) (b) Convertible note - Sophisticated investors (held at fair value) (c)	31-Dec-13 30-Jun-13
	$ $ 157,020 68,119 500,000 250,000 650,000 -
	1,307,020 318,119

This note provides information about the contractual items of the Group’s interest-bearing borrowings.

(a) Convertible note – Lind facility

On 7 March 2013, the Company entered into a funding agreement with Lind Partners, LLC, the manager of the Australian Special Opportunities Fund, LP (together “Lind”). The key terms of the agreement can be found in the Company’s 2013 annual report.

Convertible Securities:

On execution and in accordance with the funding agreement, the Company issued the following securities to Lind during the period:

On 2 October 2013, the Company issued 5,000,000 shares at $0.01 per share on conversion of $50,000 of a $300,000 convertible security, pursuant to the Share Purchase and Convertible Security Agreement announced 8 March 2013.
On 13 December 2013, the Company issued 12,500,000 shares at $0.004 per share on conversion of $50,000 of a $300,000 convertible security, pursuant to the Share Purchase and Convertible Security Agreement announced 8 March 2013.

At 31 December 2013 the Company owed Lind $200,000 of a $300,000 convertible security. The Convertible Security with Lind may be converted into fully paid ordinary shares of the Company at any time at the discretion of Lind in the period from 5 July 2013 to 7 March 2015. Conversion shares are calculated based on conversion amount divided by conversion price being 91% of average 3 consecutive days VWAP during 20 days immediately prior to the relevant conversion notice. Conversion occurs by Lind providing a conversion notice of no less than one business day prior notice during that period or occurs automatically at 7 March 2015 at a 5 day VWAP before the last day of the term. As

32 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

Lind can request conversion with not less than one business days’ notice, the convertible security is treated as a current liability.

On 11 March 2014, the Company executed a settlement deed with Lind Partners LLC, the manager of the Australian Special Opportunity Fund LP, (together “Lind”) in relation to the existing convertible security under the Share Purchase and Convertible Security Agreement, announced 8 March 2013 (“Principal Agreement”). The key terms of the settlement deed are that Minbos must repay or assign the current liability of the convertible security of $200,000 and to issue 10,000,000 shares, subject to shareholder approval, in satisfaction of the convertible security and to obtain certain releases under the Principal Agreement.

(b) Convertible note – Management

On 2 April 2013 Minbos signed convertible note deeds with David Reeves (former Non-Executive Director) and James Carter (former Chief Financial Officer and joint Company Secretary) who provided the Company with $250,000 each. The conversion price of the convertible note is $0.063 which is 150% of the 20 day volume weighted average price (VWAP) of Minbos shares at the date of execution of the facility agreement. Interest is payable at a rate of 12% per annum (15% from December 2013 for James Carter), payable monthly in arrears, with principal repayment or conversion in 9 months from the date of first drawdown.

The conversion of the convertible note issued to David Reeves was approved by Shareholders at the Company’s General Meeting held on 8 July 2013.

Under these convertible notes, David Reeves and James Carter received interest totalling $14,959 and $17,589 respectively, during the period. The initial investment of $500,000 plus interest of $267 was outstanding at 31 December 2013.

(c) Convertible note – Sophisticated investors

During the period the Company signed a capital raising/corporate mandate dated 4 July 2013 between the Company and CPS Capital Group Pty Ltd and a convertible note trust deed dated 27 August 2013 (together the Convertible Note Facility). On 10 December 2013 the Company’s amended its capital raising/corporate mandate with CPS, whereby the issue of the convertible notes will raise a total of up to $800,000 (before costs) in three tranches.

Tranche 1:

Facility: $250,000 (the Company received the funds during the period, which converted into 83,333,333 shares and 83,333,333 options on 17 January 2014).

Interest: Payable at 15% at the maturity date.

Maturity date: The first to occur, the date of conversion or 5 months from the date the convertible notes are issued. Automatic conversion: If prior to the maturity date the company has raised at least $2 million pursuant to a subsequent rights issue or placement, the Notes will automatically convert.

Conversion price: (i) $0.01 per share, if the Angolan phosphate licences are renewed within 3 months of the notes being issued.

(ii) $0.003 per share, if the Angolan phosphate licences are not renewed within 3 months of the notes being issued.

Options: The shares will have a 1:1 free attaching call option with an exercise price of 1 cent and an expiry of 30 December 2016.

Event of default: If prior to maturity date, the Company is unable to raise a minimum of $2 million (before costs) in a rights issue or placement.

Default interest: 15% per annum payable monthly in arrears, from the date of closure of the rights issue, if less than $2 million is raised.

Tranche 2:

Facility: $250,000 (the Company received the funds during the period). The key terms of Tranche 2 are the same as Tranche 1, refer above.

33 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

Tranche 3:

Facility: $300,000 (the Company received $150,000 during the period and $150,000 subsequent to year end). Interest: 15% per annum.

Maturity date: The first to occur, the date of conversion or 5 months from the date the convertible notes are issued. Automatic conversion: If prior to maturity date, the Company has raised a minimum of $1 million (before costs) in a rights issue or placement and Mongo Tando has been granted a new licence (or part there-of) that a minimum, covers the area of the Cacata Deposit, noteholders will automatically convert into fully paid ordinary shares at the conversion rate.

Conversion price: (i) $0.01 per share, if the Angolan phosphate licences are renewed within 3 months of the notes being issued.

(ii) $0.003 per share, if the Angolan phosphate licences are not renewed within 3 months of the notes being issued.

Options: The shares will have a 1:1 free attaching call option with an exercise price of 1 cent and an expiry of 30 December 2016.

Event of default: If prior to maturity date, the Company is unable to raise a minimum of $1 million (before costs) in a rights issue or placement and Mongo Tando has not been granted a new licence (or part there-of) that a minimum, covers the area of the Cacata Deposit.

Default interest: 15% per annum payable monthly in arrears, from the date of closure of the rights issue, if less than $2 million is raised.

During the reporting period all current outstanding convertible note holders became secured convertible note holders pursuant to the execution of a general security deed with the Company.

8. DERIVATIVE FINANCIAL LIABILITIES

Pursuant to accounting standards, the collateral shares and the embedded derivative option component of the convertible note with Lind is classified as a derivative financial liability. The value of the derivative fluctuates with the Company’s underlying share price and is re-valued at each reporting date.

Derivative Liabilities	31-Dec-13 30-Jun-13
	$ $ 42,980 231,881
	42,980 231,881

34 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

9. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

a) Fair value hierarchy

AASB 13 requires disclosure of fair value measurements by level of the following fair value measurements hierarchy:

(i) Level 1 – the instrument has quoted prices (unadjusted) in active markets for identical assets and liabilities;
(ii) Level 2 – a valuation technique is used using inputs other than quoted priced within Level 1 that are observable for the financial instrument, either directly (i.e. as prices), or indirectly (i.e. derived from prices); or
(iii) Level 3 – a valuation technique is sued using inputs that are not based on observable market data (unobservable inputs).

The following table presents the Group’s financial liabilities measured and recognised at fair value at 31 December 2013 and 30 June 2013 on a recurring basis:

Period ended 31 December 2013 Financial liabilities Borrowings Derivative financial instrument Year ended 30 June 2013 Financial liabilities Derivative financial instrument	Level 1 Level 2 Level 3 Total $ $ $ $
	- (650,000) - (650,000) - (42,980) - (42,980)
	- (692,980) - (692,980)
	- (231,881) - (231,881)
	- (231,881) - (231,881)

b) Valuation techniques used to derive level 2 and level 3 fair values

The fair value of financial instruments traded in active markets is based upon quoted market prices at the end of the reporting period.

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Group makes a number of assumptions based upon observable market data existing at each reporting period.

For current borrowings, the fair value approximates the carrying value amount, as the impact of discounting is not significant.

The fair value of the convertible note derivative is determined using an option pricing model based upon various inputs at the end of the reporting period. These instruments are classified as level 2 financial liabilities.

The Group does not have any level 3 assets or liabilities.

35 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

10. ISSUED CAPITAL

(a) Issued and fully paid

(a) Issued and fully paid
Ordinary shares (b) Movement reconciliation ORDINARY SHARES	30-Jun-13 31-Dec-13
	$ No. $ No.
	25,563,358 173,815,605 25,440,555 154,315,605
	25,563,358 173,815,605 25,440,555 154,315,605
	Date Quantity Issueprice $
Balance 30 June 2013	154,315,605 25,440,555
Consideration for tenement acquistion(i) Conversion of Lind convertible security(ii) Conversion of Lind convertible security(iii) Issue of equity costs	10/09/2013 2,000,000 0.014 28,000 2/10/2013 5,000,000 0.010 50,000 13/12/2013 12,500,000 0.004 50,000 - - - (5,197)
Balance 31 December 2013	173,815,605 25,563,358

(i) On 10 September 2013 the Company issued 2,000,000 shares as consideration for the acquisition of phosphate tenements in Western Australia.

(ii) On 2 October 2013, the Company issued 5,000,000 shares at $0.01 per share on conversion of $50,000 of a $300,000 convertible security, pursuant to the Share Purchase and Convertible Security Agreement announced 8 March 2013.
(iii) On 13 December 2013, the Company issued 12,500,000 shares at $0.004 per share on conversion of $50,000 of a $300,000 convertible security, pursuant to the Share Purchase and Convertible Security Agreement announced 8 March 2013.

36 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

11. RESERVES

11. RESERVES
Share-based payments reserve Employee share plan reserve	31-Dec-13	30-Jun-13
	$ No. 1,299,543 9,750,000 294,020 -	$ No. 1,269,657 18,750,000 197,889 -
Foreign currency translation reserve	1,512,294 -	1,214,954 -
	3,105,857 9,750,000	2,682,500 18,750,000


		31-Dec-13 30-Jun-13
		$ $
Movement reconciliation
Share-based payments reserve Balance at the beginning of the period		1,269,657 1,170,882
		29,886 98,775
		1,299,543 1,269,657
		197,889 - 96,131 197,889
		294,020 197,889

		1,214,954 (289,123) 297,340 1,504,077
Effect of translation of foreign currency operations to group
Balance at the end of the period		1,512,294 1,214,954

37 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

12. SHARE-BASED PAYMENTS

(a) Fair value of consideration options granted during the year

During the period the Company issued 5,000,000 unlisted options to William Oliver (Non-Executive Director) to provide a performance linked incentive component in the remuneration package to motivate, reward and further align the Director’s interest with that of the shareholders.

The Company has internally measured the fair value of the options granted by adapting a Black-Scholes option pricing model. The model inputs are shown in the table below:

Black & Scholes Option Pricing Model	Black & Scholes Option Pricing Model
Date of Grant Date of Expiry Strike (Exercise) Price Underlying Share Price (at date of issue) Risk Free Interest Rate (at date of issue) Volatility (up to date of issue) Years to Expiry Number of options granted Dividend Yield Black & Scholes Valuation Total Fair Value of Options	25/11/2013 30/12/2016 0.010 $ 0.009 $ 2.84% 110% 3.1 5,000,000 0% 0.006 $ 29,886 $

(b) Recognised equity-based payment expense

The options vest immediately therefore the equity based payment recognised in the current period is $29,886.

13. RELATED PARTIES

(a) Material Contracts with related parties

On 10 December 2013 the Company signed a capital raising/corporate advisory mandate with CPS Capital Group Pty Ltd (‘CPS’), a Company which Damian Black (Executive Director) is a Director. In accordance with the mandate, CPS agreed to provide the Company with a convertible note facility of $800,000 (refer below for further detail) and act as manager to the offer for a 3:7 renounceable rights issue, to raise $1.1million at one cent per share (before costs). The following fees are outlined in the mandate:

CPS will receive an establishment fee of 6.6% inclusive of GST on funds raised for the Company via the convertible note issues;
CPS will receive a 6% management fee for the final amount raised under the rights issue;
CPS will receive a corporate advisory/public relations fee of $5,500 per month inclusive of GST payable monthly in arrears, for a period of 12 months from the date of the agreement; &
CPS will also receive a placement fee of 6% on any future capital raised through investors for a period of 12 months.

Under the convertible notes, CPS received $33,000 in establishment fees during period. No other fees were outstanding at 31 December 2013.

38 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

(b) Loans from related parties

Convertible Note - Management

On 2 April 2013 Minbos signed convertible note deeds with David Reeves (former Non-Executive Director) and James Carter (former Chief Financial Officer and former joint Company Secretary) who agreed to provide the Company with $250,000 each. For the key terms of the convertible note refer to Note 7(b).

Convertible Note – Sophisticated Investors

During the period the Company signed a capital raising/corporate mandate with CPS Capital Group Pty Ltd (‘CPS’), a Company which Damian Black (Executive Director) is an Associate Director, CPS is a related party by virtue of it acting in concert with Mr Black. In accordance with the mandate, CPS agreed to raise $800,000 (before costs) through the issue of convertible notes. During the period the Company received $650,000 from CPS, with the remaining $150,000 being received subsequent to year end. For the key terms of the convertible note refer to Note 7(c).

Under these convertible notes, CPS received $33,000 in establishment fees during period. The initial investment of $650,000 was outstanding at 31 December 2013, of which, $250,000 was converted into 83,333,333 shares and 83,333,333 options on the 17 January 2014.

(c) Options issued to related parties

(d) Other transactions with related parties

Legal Services

During the period the Company used Steinepreis Paganin Lawyers & Consultants for legal services, a firm which Peter Wall (Non-Executive Director) is a partner. During the period the Company incurred fees from Steinepreis Paganin Lawyers & Consultants of $87,325 of which $28,795 was outstanding at 31 December 2013.

Office Rent

During the period the Company paid Worldwide Mining Ltd rent for its office on Level 1/278 Stirling Hwy. The office is sub-leased from Worldwide Mining Ltd which is owned 100% by a Company, Geopacific, of which James Carter (former Chief Financial Officer and former joint Company Secretary) owns approximately 5.5%. The total amount paid / payable to Worldwide Mining Ltd & or Geopacific during the period was $12,780.

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

There are no other transactions with key management personnel during the period.

39 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Notes to the Consolidated Financial Statements

14. DIVIDENDS

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

15. COMMITMENTS

There are no new commitments, other than the commitments that existed as at 30 June 2013, that the Company has entered into during the period under review.

16. CONTINGENCIES

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

17. SUBSEQUENT EVENTS

On 21 February 2014, the Company appointed Mr Damian Black as Executive Director and Mr Peter Wall and NonExecutive Director following the resignation of Scott Sullivan as Managing Director and Non-Executive Chairman and Non-Executive Director, David Reeves.

40 | P a g e

Minbos Resources Limited – Half Year Report For the period ended 31 December 2013

Directors’ Declaration

The Directors of the company declare that:

(a) The financial statements and notes of the Consolidated are in accordance with the Corporations Act 2001 including:
(i) giving a true and fair view of the financial position as at 31 December 2013 and the performance for the half year ended 31 December 2013.
(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:

==> picture [130 x 58] intentionally omitted <==

Peter Wall Non-Executive Chairman Perth, 14 March 2014

41 | P a g e

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

==> picture [78 x 31] intentionally omitted <==

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 2013, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the 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 company 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 company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards 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 2013 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.

==> picture [78 x 31] intentionally omitted <==

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 2013 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 ability of the consolidated entity to continue as a going concern is dependent upon the successful renewal of the Cabinda licence and the consolidated entity being able to raise additional funds as required to fund ongoing exploration commitments, for working capital and to repay potential liabilities that may arise under the convertible notes. These conditions, along with other matters as set out in Note 2, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’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.

Emphasis of matter

We draw attention to note 4 and 6 in the financial statements which describes an uncertainty relating to the recoverability of the Group’s investment in and loans to Associate. Our review report is not modified in respect of this matter.

BDO Audit (WA) Pty Ltd

==> picture [120 x 66] intentionally omitted <==

Phillip Murdoch Director

Perth, 14 March 2014

AI assistant

MINBOS RESOURCES LIMITED — Interim / Quarterly Report 2014

65355_rns_2014-03-13_2ba2da68-f828-4736-9c4a-fcc3e4212724.pdf

Half Year Report

Contents

Corporate Directory

Directors & Officers

Bankers

Auditors

Registered Office

Share Registry

Solicitors

South African Office

Public Relations

Securities Exchange

Australian Business Number

Review of Operations

1. GROUP OVERVIEW

(a) Highlights

Review of Operations

Projects

Review of Operations

(b) Resources

2. 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

Operating Costs

Review of Operations

Marketing and Product Pricing

Financial Model

Review of Operations

Figure 7: Sensitivity Graph

Beneficiation Testwork

Review of Operations

Phosphoric Acid Test Work

Outlook

(b) Chivovo deposit

(c) Cambota deposit

(d) Future Exploration

Review of Operations

3. DRC PROJECT OVERVIEW

(a) History and Ownership

(b) Kanzi Deposit

Review of Operations

Scoping Study

Divestment of DRC Asset

Competent Person’s Statement Ms Kathleen Body

Review of Operations

Directors’ Report

1. BOARD OF DIRECTORS

2. CHIEF FINANCIAL OFFICER

3. COMPANY SECRETARY

4. PRINCIPAL ACTIVITIES

5. FINANCIAL RESULTS

Directors’ Report

6. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

7. SUBSEQUENT EVENTS

Directors’ Report

8. CORPORATE STRUCTURE

KEY:

Directors’ Report

9. LEAD AUDITOR’S INDEPENDENCE DECLARATION

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

MINBOS RESOURCES LIMITED Interim / Quarterly Report 2014