NEURIZER LTD — Interim / Quarterly Report 2012

Mar 13, 2012

Marathon Resources Limited ACN 107 531 822

Interim Financial Report 31 December 2011

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CONTENTS

DIRECTORS’REPORT	DIRECTORS’REPORT	3
AUDITOR’S	INDEPENDENCE DECLARATION	5
FINANCIAL	STATEMENTS	6
NOTES	`	11
DIRECTORS’DECLARATION		14
AUDITOR’S	STATEMENT	15

2

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

The directors present their report on Marathon Resources Ltd for the half year ended 31 December 2011 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 May 2004

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

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

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

Secretary

Stuart Appleyard LLB Appointed 28 January 2004

Review of Operations

Shareholders would be aware from the Company’s 2011 Annual Report, of the South Australian Government’s unprecedented action on 22 July 2011 when it announced its intention to ban mining at Arkaroola. The Government then, on 29 July 2011 by Proclamation, reserved an area of the Northern Flinders, including the whole of the Company’s Mt Gee tenement EL 4355, from the operation of the Mining Act to prevent future exploration and mining in the area. The Proclamation meant that on the expiry of EL 4355 on 22 February 2012, the licence would not be renewed.

In the period under review, and as a consequence of the Government’s actions, the Company has withdrawn from the Mt Gee tenement and has attended to its obligations under the exploration lease in respect of rehabilitation and revegetation of the site. No further exploration activities were conducted in this period.

Discussion took place with the South Australian Government following the 22 July 2011 announcement concerning its intention to enter good faith negotiations with the Company in order to consider compensation for exploration expenses incurred by Marathon at Mt Gee. Those negotiations were unsatisfactory and inconclusive and the Company issued proceedings against the Government in the Supreme Court of South Australia on 11 November 2011 seeking recourse.

In the Chairman’s report in the Annual Report 2011 and in Notes 1p, 7 and 20 to the Annual Report contained therein, reference was made to the carrying value of exploration and evaluation expenditure in the accounts of the Company as at 30 June 2011. Impairment of the asset has occurred in the current period and as a result of compensation of $5 million received on 27 February 2012, the Company has written off all expenditure. A receivable for the funds received has been recognized totaling $5 million.

3

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

MATTERS SUBSEQUENT TO END OF THE HALF YEAR

Since the 31 December 2011 the following events or transactions occurred:

1. On 13 February 2012 the Company entered into a Deed with the State of South Australia to settle the action commenced in the Supreme Court of South Australia. The settlement was effected and parties released from the action following the payment of an amount of $5 million which was received by the Company on 27 February 2012;

2. Exploration Lease EL 4355 Mt Gee expired on 22 February 2012;

3. On 28 February 2012 the Arkaroola Protection Bill 2011 was passed by the Legislative Council in the South Australian Parliament subject to two minor amendments which have been referred back to the House of Assembly.

AUDITOR’S INDEPENDENCE

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

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Peter Williams Director

Christopher Schacht Director

Dated in Adelaide, South Australia this 9th day of March 2012

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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

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 2011, 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

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J L Humphrey Partner

Adelaide, 9 March 2012

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

Our Ref: Marathon Resources Limited_Dec 11.Docx

MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITY STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2011

Notes	Consolidated Group 31 December 2011 31 December 2010
Revenue - Interest income Other income 5 Depreciation expense Loss on disposal fixed assets Exploration Expenditure written off - Current period expenses 2 - Impairment of Mt Gee 2a Property, plant and equipment written off 2b Employee benefit expenses Occupancy expense Share based payment expenses 3 Consulting and legal expenses Travel expenses ASX listing and registry expenses Corporate administration Fair value gain/(loss) on held for trading financial assets Reversal of provision for legal action 4 Supreme Court action costs 5 (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 Total comprehensive income for the period Earnings per share Basic (cents per share) Diluted (cents per share)	75,380 37,758 5,000,000 - (152,380) (79,972) (26,629) - (291,394) (11,384) (15,933,546) - (152,357) - (862,869) (466,711) (82,964) (84,070) (77,410) (228,948) (270,359) (222,605) (29,756) (18,782) (56,426) (56,568) (199,614) (205,474) - 20,700 317,300 - (629,679) -
	(13,372,703) (1,316,056) - 221,076
	(13,372,703) (1,094,980)
	(28,500) 172,700
	(28,500) 172,700
	(13,401,203) (922,280)
	(14.5) (1.4) (14.5) (1.4)

The Accompanying notes form part of these financial statements

6

MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER2011
Notes	Consolidated Group 31 December 2011 30 June 2011
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Settlement proceeds receivable Financial assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Exploration and evaluation expenditure 2a TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Short term provisions TOTAL CURRENT LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	3,581,221 6,344,151 117,030 110,244 5,000,000 - 97,100 125,600
	8,795,351 6,579,995
	561,552 740,919 - 15,933,546
	561,552 16,674,465
	9,356,903 23,254,460
	572,583 324,631 107,356 929,072
	679,939 1,253,703
	8,676,964 22,000,757
	44,033,982 44,033,982 864,705 815,795 (36,221,723) (22,849,020)
	8,676,964 22,000,757

The accompanying notes form part of these financial statements

7

MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITY STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2011

Balance at 1 July 2011 Fair value of share options issued Financial asset revaluation Total comprehensive income for the period Balance at 31 December 2011 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	Issued Capital Retained Losses Share Option Reserve Financial Asset Reserve Total
	44,033,982 (22,849,020) 968,623 (152,828) 22,000,757 - - 77,410 - 77,410 - - - (28,500) (28,500) - (13,372,703) - - (13,372,703)
	44,033,982 (36,221,723) 1,046,033 (181,328) 8,676,964
	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 16,326,203

The accompanying notes form part of these financial statements

8

MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITY STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2011

Notes	Consolidated Group 31 December 2011 31 December 2010
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 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	(2,685,809) (1,062,234) 75,381 37,758 - 221,076
	(2,610,428) (803,400)
	- 300 (130,115) (4,545) (22,387) (182,369) - (326,330)
	(152,502) (512,944)
	- -
	(2,762,930) (1,316,344) 6,344,151 1,940,375
	3,581,221 624,031

The accompanying notes form part of these financial statements

9

MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITY 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 2011 comprises the Company and its subsidiary (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 2011 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 2011.

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 June 2011.

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

NOTE 2 –EXPLORATION EXPENDITURE WRITTEN OFF

Expenditure incurred preparatory to final approval of drilling programme DEF (Declaration of Environmental Factors) and related camp costs Costs post government ban on mining at Arkaroola including withdrawal from tenement expenditure Exploration unallocated overheads Total current period expenses NOTE 2a –IMPAIRMENT MT GEE EL 4355 Mt Gee capitalised exploration expenditure Impairment expense Capitalised expenditure carried forward	Dec2011 Dec2010
	77,742 - 208,998 - 4,654 11,384
	291,394 11,384
	15,933,546 15,784,612 (15,933,546) -
	- 15,784,612

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

NOTE 2b –PROPERTY PLANT AND EQUIPMENT WRITTEN OFF

Written down value of leasehold improvements at the exploration camp servicing the Arkaroola Mt Gee tenement written off on abandonment of camp pursuant to the withdrawal from the tenement.	Dec 2011 Dec 2010 152,357 -
	152,357 -

NOTE 3 –SHARE BASED PAYMENTS

The following options were granted in the 2010/2011 year as follows:

• 640,000 options to a number of staff and consultants on 30 September 2010

40,000 options to a number of staff and consultants on 30
eptember 2010 ,000,000 options to Chairman of Directors in three tranches Number Exercise Date Expiry Date Value 500,000 1 Nov 2012 1 Nov 2013 114,967 750,000 1 Nov 2013 1 Nov 2014 165,439 750,000 1 Nov 2014 1 Nov 2015 161,966 Total fair value of the options 442,372 air value recognised as an expense over the vesting period	- 209,968 77,410 18,980
	77,410 228,948

• 2,000,000 options to Chairman of Directors in three tranches

Fair value recognised as an expense over the vesting period

NOTE 4 –PROVISION FOR LEGAL ACTION

In the 2008 financial year proceedings were brought against the Company by an ex employee for breach of contract with a maximum exposure of $ 1.6 million. A provision was created in that year of $ 800,000. Directors expected that the claim would be successfully defended. The matter was eventually listed for trial in the Supreme Court of South Australia commencing 17 October 2011. During proceedings the plaintiff accepted dismissal of the action, each party to meets its own costs.

Accordingly the excess provision of $ 317,300 net of all expenses in the current half year, has been reversed by credit to the comprehensive income account.

NOTE 5 –SUPREME COURT OF SOUTH AUSTRALIA ACTION

On 11 November 2011 the Company issued proceedings in the Supreme Court of South Australia against the Government of South Australia. In essence the action seeks orders for judicial review and declaration that the proclamation made by the Governor of South Australia reserving an area of land at Arkaroola under the Mining Act 1971 (SA) is invalid. The proclamation effectively stripped the Company’s future exploration rights under it’s Mt Gee (EL4355) licence. The Company seeks restoration of its rights pursuant to EL 4355.

Costs of advice and legal expenses in the issuing of proceedings

Settlement receivable –Refer Note 7

• 629,679 629,679 - - 5,000,000

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

NOTE 6 –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.

Segment performance	TENEMENTS	TENEMENTS	INVESTMENT	UNALLOCATED	TOTAL
	JORC
	COMPLIANT
	RESOURCE	OTHER
Six months ended 31 December 2011
Income	-	-	-	5,075,380	5,075,380
Depreciation	(132,694)	-	-	(19,686)	(152,380)
Exploration expenditure	(443,751)	-	-	-	(443,751)
Overheads	(311,770)	-	-	(1,606,636)	(1,918,406)
Impairment	(15,933,546)	-	-	-	(15,933,546)
Movement in fair value of
financial assets	-	-	-	-	-
Net (loss) / profit before tax	(16,821,761)	-	-	3,449,058	(13,372,703)
Six months ended 31 December 2010
Income	-	-	-	37,758	37,758
Depreciation	(21,088)	-	-	(58,884)	(79,972)
Exploration expenditure	-	(11,384)	-	-	(11,384)
Overheads	-	(8,339)	-	(1,274,818)	(1,283,157)
Movement in fair value of
financial assets	-	-	20,700	-	20,700
Net (loss) / profit before tax	(21,088)	(19,723)	20,700	(1,295,944)	(1,316,056)

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

NOTE 6 –SEGMENT INFORMATION (con’t)

Segment assets and liabilities

As at 31 December 2011 Total assets Total liabilities As at 30 June 2011 Total assets Total liabilities	TENEMENTS INVESTMENTS UNALLOCATED TOTAL
	JORC COMPLIANT RESOURCE OTHER 5,496,411 - 97,100 3,763,392 9,356,903
	197,361 - - 482,578 679,939
	16,593,900 - 125,600 6,534,960 23,254,460
	113,215 - - 1,140,488 1,253,703

NOTE 7 –SUBSEQUENT EVENTS

On 13 February 2012 the Company entered into a Deed with the State of South Australia to settle the action commenced in the Supreme Court of South Australia. The settlement was effected and parties released from the action following the payment of an amount of $5 million which was received by the Company on 27 February 2012;

Exploration Lease EL 4355 Mt Gee expired on 22 February 2012;

On 28 February 2012 the Arkaroola Protection Bill 2011 was passed by the Legislative Council in the South Australian Parliament subject to two minor amendments which have been referred back to the House of Assembly.

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

13

MARATHON RESOURCES LIMITED ACN 107 531 822 AND CONTROLLED ENTITY 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 13, 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 of the consolidated entity’s financial position as at 31 December 2011 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 9[th] day of March 2012

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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

EPORT

INDEPENDENT EPORT TO THE MEMBERS OF MARATHON RESOURCES LIMITED

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 2011, 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 comprising both the Company and the entities it controlled at the halfhalf-year.

-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.

Audi

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 ial position as at 31 December 2011 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.

Basis for Qualified Conclusion

Included in the annual financial report of the company at 30 June 2011 is a disclosure relating to the accounting treatment of exploration and evaluation assets at Mt Gee and certain leasehold improvements at Umberatana with a combined carrying value of $16,211,764.

On 22 July 2011 (subsequent to annual financial reporting date) the South Australian government announced protection measures for Arkaroola in the States Northern Flinders Ranges including reservation of the Mt Gee area from the operation of the Mining Act. The government also announced a proposal to ban mining in Arkaroola by enacting special purp as it meant that this tenement would not be renewed when it expired on 22 February 2012.

The directors concluded at that time that the announcement of the mining ban occurred subsequent to reporting date that there was no requirement for the impairment of the exploration assets and associated leasehold improvements. In our opinion, this represented a departure from Australian Accounting Standard AASB 6 Exploration and evaluation of Mineral Resources and AASB 136 Impairment of assets, which requires assets to be considered for impairment using all available information. Given the amount of public debate about the future of mining in the Arkaroola region, we believe the go announcement also clarified an uncertainty that existed at 30 June 2011. In accordance with AASB 110 Events after the reporting period the impairment should be recognised. In our opinion, the impairment was fundamental to a proper appreciation of the consolidated

Had Marathon Resources Ltd at 30 June 2011 impaired the exploration and evaluation asset as well as the associated leasehold improvements the financial report would have disclosed a net asset position of $5,788,993 and a loss for the year after tax of $18,980,256. There would be no impact on the cash flows of the group.

In the period ended 31 December 2011, the directors entered into negotiations with the South Australian Government in order to consider compensation for exploration expenses incurred in relation to Mt Gee. Those negotiations were not satisfactorily resolved which results in the company issuing proceedings against the government seeking recourse.

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On the 13[th] of February 2012 the company entered into a deed of settlement with the South Australian government to settle the action. The agreed settlement was $5 million. The directors have impaired the Mt Gee and associated assets in the period to 31 December 2011 as outlined in note 2(a), 2(b) and 7 and recognised a receivable for the settlement (Note 7).

Had Marathon Resources Ltd impaired the exploration and evaluation asset as well as the associated leasehold improvements in the prior period, which in our opinion was the required treatment, the interim financial report would have disclosed an unchanged net asset position of $8,676,964 and a profit for the half-year after tax of $2,839,061 to 31 December 2011 compared to the reported loss of $13,372,703. There would be no impact on the cash flows of the group.

Qualified Conclusion

Based on our review, which is not an audit, with the exception of the matter described in the preceding paragraph, 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 financial position as at 31 December 2011 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.

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GRANT THORNTON SOUTH AUSTRALIAN PARTNERSHIP Chartered Accountants

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J L Humphrey Partner

Adelaide, 9 March 2012