NEURIZER LTD — Interim / Quarterly Report 2011

Mar 14, 2011

Marathon Resources Limited ACN 107 531 822

Interim Financial Report 31[st] December 2010

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CONTENTS

DIRECTORS’ REPORT

DIRECTORS’ DECLARATION

AUDITOR’S INDEPENDENCE DECLARATION

FINANCIAL STATEMENTS

NOTES

AUDITOR’S STATEMENT

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES DIRECTORS’ REPORT

The directors present their report on Marathon Resources Ltd for the half year ended 31[st] December 2010 and the state of the affairs of the Company at that date.

In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors

Persons who have been Directors in the Company during or since the end of the half year are:

Peter Williams BEc FCA Chairman Appointed 21[st] May 2004

John G. (Shad) Linley BSc (Hons), F Aus IMM Doctorate of Philosophy (Adelaide University) Director (Chief Executive Officer) Appointed 30[th] June 2008

Chen Zeng BA (Economics), Masters Degree in International Finance Shanghai University of Finance & Economics Director (Non-executive) Appointed 27[th] December 2006

Christopher Schacht Director (Non-executive) Appointed 23[rd] January 2008

Secretary

Stuart Appleyard LLB Appointed 28[th] January 2004

Review of Operations

It has been well documented and shareholders are aware that the Mt Gee deposit is the fifth-largest, undeveloped uranium resource in Australia.

Mineralisation at the Mt Gee deposit is open in three directions, so the ultimate resource should be larger than the current estimate of 69,000,000 lbs of U3O8. High grade uranium has also been intersected by limited drilling to date at the neighbouring Armchair and Hodgkinson deposits.[*ASX Release 18 December 2009 – see below]

On 3[rd] January 2011 the Company accepted the offer from the Minister for Resources Development to renew the exploration licence EL 4355 for the period up to 22[nd] February 2012. The renewal enables the Company to undertake approved exploration activities including drilling subject to new and acceptable operating conditions.

At this time Marathon Resources is preparing a Declaration of Environmental Factors (DEF) to submit to Primary Industries and Resources South Australia for approval to recommence exploration activities as soon as approval is received.

The purpose of the DEF is to enable the Company to conduct exploration to increase the knowledge of known deposits and to drill recently discovered high grade shear systems.

EL 4052 Blanchetown

Results from heli-mag, strandline surveying had produced inconclusive and it was considered that further exploration of the tenement would not yield any positive result.

Accordingly arrangements were made to surrender the EL 4052 licence which was confirmed by PIRSA on 2[nd] February 2011.

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES DIRECTORS’ REPORT

• Note – Review of Operations

Information in this Interim Financial Report relating to Exploration Results has been compiled by Mr Brenton Newell, a part-time employee of Marathon Resources Ltd and a Member of the Australian Institute of Geoscientists and Dr Phung Nguyen B.Sc (Hons), PhD (Uni.WA.), a part-time employee of Marathon and a Member of the AusIMM. The Mt Gee Mineral Resource Estimate was based on information compiled on behalf of Marathon by Tony Marshall B.Sc (Hons) Uni.Melb., a Member of the AusIMM. At time of reporting Tony Marshall was Principal Geologist with SMG Consulting and a full-time employee of that company

Each respectively have sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which each is undertaking, to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.

Each respectively consents to the inclusion in this Report of the statements based on the information in the form and context appearing.

Category Tonnes (Mt) Grade U3O8 (ppm) TonnesU3O8 kt Indicated 4 706 2.8 Inferred 47 607 28.5 Total 51 615 31.3 # at 300 ppm U3O8 cutoff

MATTERS SUBSEQUENT TO END OF THE HALF YEAR

Since the 31[st] December 2010 the following events or transactions occurred:

• On the 2[nd] February 2011 renewal of the Mt Gee Exploration Licence EL 4355 was granted by PIRSA.

• Following the renewal of the EL 4355 licence share placements were made raising $ 5,460,150.50 in new equity from the issue of 10,920,301 ordinary fully paid shares.

• Subsequent to the share placements a 1 for 10 non renounceable rights issue at 50 cents was announced on 16[th] February 2011. The rights issue could raise up to $ 4,399,499 if fully subscribed.

AUDITOR’S INDEPENDENCE

The auditor’s independence declaration is included on page 5 of this interim financial report.

Peter Williams Director

Christopher Schacht Director

Dated in Adelaide, South Australia this 11[th] day of March 201

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Level 1, 67 Greenhill Rd Wayville SA 5034 GPO Box 1270 Adelaide SA 5001

T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au

AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF MARATHON RESOURCES LIMITED

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Marathon Resources Limited for the half-year ended 31 December 2010, I declare that, to the best of my knowledge and belief, there have been:

• a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• b no contraventions of any applicable code of professional conduct in relation to the review.

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GRANT THORNTON SOUTH AUSTRALIAN PARTNERSHIP Chartered Accountants

J L Humphrey Partner

Adelaide, 11 March 2011

Grant Thornton South Australian Partnership ABN 27 244 906 724 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31[ST] DECEMBER 2010

Notes	Consolidated Group 31 December 2010 31 December 2009
Revenue - Interest income - Other miscellaneous income Gain on sale of financial assets Depreciation expense Exploration Expenditure written off - Current period expenses - Prior period expenditure Employee benefit expenses Occupancy expense Share based payment expenses 2 Consulting expenses Travel expenses ASX listing and registry expenses Corporate administration Fair value gain/(loss) on held for trading financial assets (Loss) before income tax Income tax (expense)/benefit (Loss) for the period after tax expense Other comprehensive income Changes in fair value of available for sale financial assets Reclassification of available for sale financial asset reserve to profit and loss upon disposal Total comprehensive income for the period Earnings per share Basic (cents per share) Diluted (cents per share)	37,758 60,499 - 1,186 - 256,027 (79,972) (71,735) (11,384) (40,732) - (650,658) (466,711) (805,958) (84,070) (81,368) (228,948) (696,000) (138,009) (135,424) (18,782) (27,964) (56,568) (90,441) (290,070) (339,139) 20,700 46,000
	(1,316,056) (2,575,707) 221,076 -
	(1,094,980) (2,575,707)
	172,700 (86,250) - 556,455
	172,700 642,705
	(922,280) (1,933,002)
	(1.4) (3.3) (1.4) (3.3)

The Accompanying notes form part of these financial statements

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES STATEMENT OF FINANCIAL POSITION AS AT 31[ST] DECEMBER 2010

MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES STATEMENT OF FINANCIAL POSITION AS AT 31STDECEMBER 2010
Notes	Consolidated Group 31 December 2010 30 June 2010
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Financial assets TOTAL ASSETS NON-CURRENT ASSETS Property, plant and equipment Exploration and evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Short term provisions TOTAL CURRENT LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained losses TOTAL EQUITY	624,031 1,940,375 67,095 61,830 354,000 160,800
	1,045,126 2,163,005
	458,094 351,454 15,784,612 15,482,222
	16,242,706 15,833,676
	17,287,832 17,996,681
	105,623 108,353 856,005 868,793
	961,628 977,146
	16,326,204 17,019,535
	36,553,326 36,553,326 2,563,250 2,161,602 (22,790,373) (21,695,393)
	16,326,204 17,019,535

The accompanying notes form part of these financial statements

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31[ST] DECEMBER 2010

Balance at 1 July 2010 Fair value of share options issued Financial asset revaluation Total comprehensive income for the period Balance at 31 December 2010 Balance at 1 July 2009 Fair value of share options issued Total comprehensive income for the period Balance at 31 December 2009	Issued Capital Retained Losses Share Option Reserve Financial Asset Reserve Total
	36,553,326 (21,695,393) 2,276,930 (115,328) 17,019,535 - - 228,948 - 228,948 - - - 172,700 172,700 - (1,094,980) - - (1,094,980)
	36,553,326 (22,790,373) 2,505,878 57,372 16,326,204
	36,542,424 (17,623,132) 1,594,227 (731,783) 19,781,736 - - 696,000 - 696,000 - (2,575,707) - 642,705 (1,933,002)
	36,542,424 (20,198,839) 2,290,227 (89,078) 18,544,734

The accompanying notes form part of these financial statements

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31[ST] DECEMBER 2010

	Notes	Consolidated Group 31 December 2010 31 December 2009
Cash flows from operating activities Payments to suppliers and employees Interest and sundry income received Research and development tax concession received Net cash provided by / (used in) operating activities Cash flow from investing activities Proceeds on disposal Plant & Equipment Proceeds on disposal of available for sale financial assets Purchase of plant and equipment Payment for operating leasehold improvements Payment for exploration activities Net cash provided by / (used in) investing activities Net cash provided by / (used in) financing activities Net (decrease) / increase in cash held Cash at the beginning of the half year Cash at the end of the half year		(1,062,234) (1,568,362) 37,758 61,685 221,076 302,898
		(803,400) (1,203,779)
		300 - - 1,232,007 (4,545) (28,981) (182,369) - (326,330) (790,672)
		(512,944) 412,354
		- -
		(1,316,344) (791,425) 1,940,375 3,839,113
		624,031 3,047,688

The accompanying notes form part of these financial statements

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES NOTES TO THE INTERIM FINANCIAL REPORT

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES

Reporting entity

Marathon Resources Limited (the “Company”) is a company domiciled in Australia. The consolidated interim financial report of the Company as at and for the six months ended 31 December 2010 comprises the Company and its subsidiaries (together referred to as the "consolidated entity" or “group”).

The consolidated annual financial report of the consolidated entity as at and for the year ended 30 June 2010 is available upon request from the Company’s registered office at 235 Port Road Hindmarsh SA, and can be viewed on the Company’s website www.marathonresources.com.au

Statement of compliance

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

The consolidated interim financial report does not include all of the information required for a full annual financial report, and should be read in conjunction with the consolidated annual financial report as at and for the year ended 30 June 2010.

Accounting policies

The accounting policies applied by the consolidated entity in this consolidated interim financial report are the same as those applied by the consolidated entity in its consolidated financial report as at and for the year ended 30[th] June 2010.

The following notes cover only events or transactions that are material to an understanding of the current interim period.

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES NOTES TO THE INTERIM FINANCIAL REPORT

NOTE 2 – SHARE BASED PAYMENTS

The following options were granted during the period:-

Share based payment expense $ 209,968

• On the 30[th] September 2010 Directors made offers of a grant of 640,000 options to a number of staff and consultants of the Company to take up ordinary shares as follows. All offers were accepted by 21[st] October and all options are exercisable on or before 15[th] October 2013. At balance date no options had been exercised.

The value of the options were calculated using the Black-Scholes option pricing model applying the following inputs:

- Exercise price	$0.34	$0.75
- Life of option	3 years	3 years
- Underlying share price	$0.733	$0.733
- Expected share price volatility	56.1	56.1
- Risk free rate	5.13%	5.13.%
- Number of options granted	590,000	50,000
- Aggregate fair value of options granted	$200,216	$9,752

All options vested on issue

• On 16[th] November 2010 2,000,000 options in three tranches were granted to the Chairman Peter Williams pursuant to shareholder approval at the AGM to take up ordinary shares as 18,980 follows:

No of Options	Exercise Date	Expiry
500,000	1 November 2012	1 November 2013
750,000	1 November 2013	1 November 2014
750,000	1 November 2014	1 November 2015

At balance date no options had been exercised

The value of the options were calculated using the Black-Scholes option pricing model applying the following inputs:

applying the following inputs:
		Tranche
	1	2	3
- Exercise price	$0.876	$1.25	$1.75
- Life of option	3 years	4 years	5 years
- Underlying share price	$0.625	$0.625	$0.625
- Expected share price volatility	64.5%	64.5%	64.5%
- Risk free rate	5.13%	5.13%	5.23%
- Number of options granted	500,000	750,000	750,000
- Aggregate fair value of options granted	$114,967	$165,439	$161,966

The total fair value of the fair value of the options issued to the Chairman was $ 442,372 which will be recognised as an expense over the vesting period.

Total value of share based payments issued during the period

228,948

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES NOTES TO THE INTERIM FINANCIAL REPORT

NOTE 2(a)

The share option reserve of $2,929,470 represents the following unexercised options at balance date:

No of Options	Exercise	Expiry date
3,000,000	$ 1.037	30.06.2011
1,000,000	$0.80	02.09.2012
1,000,000	$1.10	28.12.2014
590,000	$0.34	15.10.2013
50,000	$0.75	15.10.2013
500,000	$0.876	01.11.2013
750,000	$1.25	01.11.2014
750,000	$1.75	01.11.2015
7,640,000

None of the options listed above are classified as granted under the Company Employee Share Option Plan (ESOP) due to ASX listing Rules 10.1 and ASIC class order requirements. The options whilst not being issued under the ESOP are governed by the Company’s ESOP rules.

NOTE 3 – SEGMENT INFORMATION

Identification of reportable segments

The group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in determining the allocation of resources.

The group is managed primarily on the basis of cost centres since each cost centre has different cash requirements. Operating segments are therefore determined on the same basis. The group’s operating segments are dividend into JORC compliant Resource tenements, other tenements, investments and corporate.

JORC compliant Resource tenements

This relates to tenements on the group which the group have ongoing exploration activities. Qualifying expenditure incurred on JORC compliant Resource tenements are capitalised.

Other tenements

This relates to tenements other than JORC Compliant Resource tenements.

Investment

This segment monitors the performance of the group’s quoted investments.

Unallocated

This relates to all other income and expenses of the group which are not directly attributed to any of the above segments.

MARATHON RESOURCES LIMITED

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ACN 107 531 822 AND CONTROLLED ENTITIES NOTES TO THE INTERIM FINANCIAL REPORT

NOTE 3 – SEGMENT INFORMATION (con’t)

Segment performance TENEMENTS INVESTMENT JORC COMPLIANT RESOURCE OTHER Six months ended 31st December 2010 Income - - - Depreciation (21,088) - - Exploration expenditure - (11,384) - Overheads - (8,339) - Movement in fair value of financial assets - - 20,700 Net (loss) / profit before tax (21,088) (19,723) 20,700 Six months ended 31st December 2009 Income - - - Depreciation (19,782) - - Exploration expenditure - (691,390) - Overheads - (57,873) - Net gain on sales of financial assets - - 256,027 Movement in fair value of financial assets - - 46,000 Net (loss) / profit before tax (19,782) (749,263) 302,027	TENEMENTS INVESTMENT	UNALLOCATED TOTAL
		37,758 37,758 (58,884) (79,972) - (11,384) (1,274,818) (1,283,157) - 20,700
	(21,088) (19,723) 20,700	(1,295,944) (1,316,056)
		61,685 61,685 (51,953) (71,735) - (691,390) (2,118,421) (2,176,294) - 256,027 - 46,000
	(19,782) (749,263) 302,027	(2,108,689) (2,575,707)

Segment assets and liabilities

As at 31st December 2010 Total assets Total liabilities As at 30 June 2010 Total assets Total liabilities	TENEMENTS INVESTMENTS UNALLOCATED TOTAL
	JORC COMPLIANT RESOURCE OTHER 16,164,256 - 354,000 769,576 17,287,832
	18,074 - - 943,554 961,628
	15,692,934 23,939 160,800 2,119,009 17,996,682
	42,660 - - 933,486 977,146

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES NOTES TO THE INTERIM FINANCIAL REPORT

NOTE 4 – CRITICAL ACCOUNTING ESTIMATES

Provision of $ 800,000 on legal action with claim of $1,600,000

Proceedings have been brought against the Company by an ex employee for alleged breach of contract. The Company denies the claim and is defending the proceedings. The nature of the action is based on an all or nothing claim with a maximum exposure to the Company of $1.6 million. Marathon has separately advanced a cross claim of approximately $0.847 million. Based on legal advice the Directors believe that it is more likely than not to successfully defend the claim in its entirety. In view of the fact that the matter is complex and not without risk of an adverse outcome the Directors are of the view that a provision of 50% of the maximum exposure is still reasonable. The matter is expected to go trial and has been listed in the Supreme Court of South Australia commencing 17 October 2011.

There have been no developments that would cause earlier assessment to be revised.

NOTE 5 – CRITICAL ACCOUNTING JUDGEMENTS

No impairment of the Mt Gee exploration asset with a carrying value of $15,784,612

During the half year the company continued to negotiate the renewal of its exploration licence EL 4355 “Mt Gee” which was ultimately achieved on 2[nd] February 2011 for a term of 16 months from its earlier expiry date of 10[th] October 2010.

The renewed licence is subject to additional terms and conditions imposed by Primary Industries and Resources of South Australia (PIRSA) but will nevertheless allow the company to resume drilling activities subject to approval by PIRSA of a Declaration of Environmental Factors (DEF) in due course.

Having regard for the licence renewal and the raising of additional equity funding, dealt with elsewhere in this report, the Directors are of the opinion that there is no impairment of the Mt Gee exploration asset which has a carrying value of $15,784,612.

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITIES NOTES TO THE INTERIM FINANCIAL REPORT

NOTE 6 – ECONOMIC DEPENDENCY

Going Concern

The interim report has been prepared on the basis of going concern.

As a junior explorer the Group generally has sufficient funds on hand to meet ongoing corporate and exploration commitments. The Directors periodically consider the following;

• identify sources of additional capital and/or

• reduce the rate of expenditure.

The Group is economically dependent on the achievement of one or both of the above options.

If additional funds are not raised as and when required, the going concern basis may not be appropriate with the result that the Company may have to realise the assets and extinguish its liabilities’, other than in the ordinary course of business and in amounts different from those stated in the interim report.

Marathon Resources Limited ACN 107 531 822 235 Port Road Hindmarsh SA 5007 Telephone (08) 8348 3500 Facsimile (08) 8346 8111 admin@marathonresources.com.au www.marathonresources.com.au

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MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLING ENTITIES DIRECTORS’ REPORT

The Directors declare that:

In the opinion of the directors of the company:

1. The financial statements and notes, as set out on pages 6 to 15, are in accordance with the Corporations Act 2001 including:

2. (a) Complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001; and

3. (b) Giving a true and fair view o f the consolidated entity’s financial position as at 31 December 2010 and of its performance, as represented by the results of its operations and cash flows for the half-year ended on that date.

4. 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.

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Peter Williams Director

Christopher Schacht Director

Dated in Adelaide, South Australia this 11[th] day of March 2011

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Level 1, 67 Greenhill Rd Wayville SA 5034 GPO Box 1270 Adelaide SA 5001

T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF MARATHON RESOURCES

We have reviewed the accompanying half-year financial report of Marathon Resources Limited (“Company”), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2010, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors’ declaration of the consolidated entity, comprising both 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 and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with the 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 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 2010 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 Marathon Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

Grant Thornton South Australian Partnership ABN 27 244 906 724 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

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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 complied with the independence requirements of the Corporations Act 2001.

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 Marathon 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 2010 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.

Significant uncertainty regarding:

Access to Mt Gee

Without qualification to the conclusion expressed above, attention is drawn to Note 5 – Critical Accounting Judgements. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the carrying value of capitalised exploration expenditure associated with the Mt Gee tenement. The financial report has been prepared on the basis that there is no impairment of the $15,784,612 capitalised as exploration expenditure. That impairment decision is based on the critical assumption that the Department of Primary Industries and Resources of South Australia (PIRSA) will approve the Declaration of Environmental Factors (DEF) and the Company will be permitted to resume comprehensive exploration activities on the Mt Gee lease.

GRANT THORNTON SOUTH AUSTRALIAN PARTNERSHIP Chartered Accountants

J L Humphrey Partner

Adelaide, 11 March 2011