ORBMINCO LIMITED — Interim / Quarterly Report 2007

Mar 11, 2007

(ABN 99 073 155 781)

FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

$(ABN 99 073 155 781)$

FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2006

CONTENTS

Half-year financial report
Directors' report	3.
Auditor's independence declaration
Auditor's independent review report	6
Directors' declaration	8
Condensed consolidated income statement	9
Condensed consolidated balance sheet	10
Condensed consolidated statement of recognised income and expense
Condensed consolidated cash flow statement	12
Notes to the condensed consolidated financial statements

MONARO MINING NL DIRECTORS' REPORT

The directors of Monaro Mining NL submit herewith the financial report for the half-year ended 31 December 2006. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

The names of the directors of the company during all of and since the end of the half-year are:

Mr W R Grigor Mr M Rampe Mr M J Evans

REVIEW OF OPERATIONS

The consolidated loss of the economic entity for the half-year after income tax was \$1,099,046 (Halfyear ended 31 December 2005 loss: \$183,571).

During the half year the economic entity continued to explore for minerals in Australia and Kyrgyzstan. A more detailed review of exploration activity is included in quarterly activity reports lodged with the Australian Stock Exchange.

Total revenue comprised interest income of \$86.245 (2005; \$43.132) and income from the farm out of an Australian mineral tenement of \$50,000 (2005; \$nil). Expenditures totalled \$1,235,291 (2005; \$226,703) of which \$400,260 (2005: \$108,605) was expensed on mineral projects.

During the current half year the entity undertook preliminary exploration in Australia on a number of base metal projects in preparation for field and drilling campaigns being launched in the 2007 year. This is likely to include the commencement of drilling and other exploration activities on the Captains Flat and Mayfield Projects. Uranium exploration was focused on nine tenement areas covering approximately 3700km2 throughout Queensland, Northern Territory and Western Australia where tenement applications were lodged.

In Kyrgyz, negotiations to obtain an extensive regional geo-scientific database from Kentor Gold Ltd for the western part of the Kyrgyz Republic were completed during the half year. Kentor Gold Ltd has been operating in the country for approximately 4 years and has developed an extensive database which will assist Monaro to fast track a number of exploration steps on a number of its projects.

A drilling contract was also executed during the half year with the Kyrgyz representative of Palladex; a London based drilling company, to evaluate a number of uranium targets within the Sogul licence. It is anticipated that the program will be completed by the end of the first quarter 2007. Extensive field work has been completed in Soviet times, including drilling, which point to extensive mineralization.

Elsewhere, compilation and validation of key data in Micromine on the Kanigut Prospect is continuing and arrangements have been made with local geological contractors to commence field assessment of several other prospects within the Gavasai and Sumsar licence areas. Ouotes have also been obtained to incorporate all of the data from the North Fergana licences into a 'mineral system' in order to analyze and prioritize the data - a common approach used in the oil industry.

Looking forward the company will continue to focus on exploration activity in Australia and Kyrgyz. The entity's objectives are to establish a mineable resource while at the same time expose shareholders to a number of high impact exploration opportunities with a strong bias toward uranium.

Working Capital

Concurrent with the escalation in its activities Monaro undertook certain capital raisings aggregating \$3.6 million (before costs) during the half and issued a new series of quoted options. These actions have strengthened the entity's financial position as more fully detailed in the interim financial report.

Investment sentiment for mineral explorers listed on the Australian Stock Exchange has improved concurrent with commodity prices, particularly uranium. Whilst the outlook for the Company has improved significantly, exploration continues to involve high risk and high rewards dependent upon exploration outcomes.

Corporate Governance

During the period there were no changes to Corporate Governance Practices adopted by the Board, these being determined to be commensurate with best practice given the Company's size, its operations and the industry within which it participates. The Corporate governance Practice Statement is set out in the 2006 Annual Report.

AUDITOR'S INDEPENDENCE DECLARATION

In order to comply with Section 306 (2) of the Corporations Act 2001, the directors' report includes the auditor's independence declaration on page 5 of the half year financial report.

Signed in accordance with a resolution of the directors made pursuant to Section 306(3) of the Corporations Act 2001.

On behalf of the Directors

Mr WR Grigor Director Sydney, 12 March 2007

Stantons Internationa

ABN 41 103 088 697

LEVEL 1, 1 HAVELOCK STREET WEST PERTH WA 6005, AUSTRALIA PH: 61 8 9481 3188 · FAX: 61 8 9321 1204 www.stantons.com.au

12 March 2007

Board of Directors Monaro Mining NL Level₂ 87 Colin Street WEST PERTH WA 6005

Dear Sirs

RE: MONARO MINING NL

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Monaro Mining NL.

As Audit Director for the review of the financial statements of Monaro Mining NL for the period ended 31 December 2006, 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 $\left($ i) the review: and
• $(i)$ any applicable code of professional conduct in relation to the review.

Yours sincerely STANTONS INTERNATIONAL (Authorised Audit Company)

John Van Dieren Director

5

Stantons International

ABN 41 103 088 697

LEVEL 1, 1 HAVELOCK STREET WEST PERTH WA 6005, AUSTRALIA PH: 61 8 9481 3188 · FAX: 61 8 9321 1204 www.stantons.com.au

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF MONARO MINING NL

Report on the Half-Year Financial Report

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

Directors' Responsibility for the Half-Year Financial Report

The directors of the Company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal 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 half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2006 and its performance for the half year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Monaro Mining NL, 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, has been provided to the directors of Monaro Mining NL on 12 March 2007.

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 Monaro Mining NL 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 $(a)$ December 2006 and of its performance for the half-year ended on that date; and
• complying with Accounting Standard AASB 134 Interim Financial Reporting and $(b)$ Corporations Regulations 2001.

STANTONS INTERNATIONAL (An authorised audit company)

Stantons International

J P Van Dieren Director

West Perth, Western Australia 12 March 2007

MONARO MINING NL DIRECTORS' DECLARATION

The directors declare that:

(a) in the directors' opinion, there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become due and payable; and

(b) in the directors' opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.

Signed in accordance with a resolution of the directors made pursuant to s.303(5) of the Corporations Act 2001.

On behalf of the Directors

WR Grigor Director Sydney, 12 March 2007

Condensed consolidated income statement

For the half-year ended 31 December 2006

	Half-year ended
	2006	2005
	S	\$
Revenue from continuing operations
Other income	136 245	43 132
Direct Operating costs
Depreciation and amortisation expense	(12953)
Exploration and evaluation expense	$(400\,260)$	(108605)
General and administrative	(785 562)	(117160)
Other expenses	(36.516)	(938)
(Loss) Profit before income tax	(1099046)	(183.571)
Income tax expense
(Loss) Profit from continuing operations	(1.099046)	(183571)
(Loss) Profit for the half-year	(1099046)	(183571)
(Loss) Profit attributable to members of Monaro Mining NL	(1099046)	(183571)

Earnings per share:	Cents	Cents
Basic (loss) profit per share	(5.4)	(1.25)
Diluted (loss) profit per share	(5.4)	(1.25)

Condensed consolidated balance sheet

As at 31 December 2006

	31 December 2006	30 June 2006
	\$	\$
ASSETS
Current assets
Cash and cash equivalents	5 480 021	3015374
Trade and other receivables	38 520	18.995
Other	11915	3 633
Total current assets	5 530 456	3 038 002
Non-current assets
Other financial assets	50 000	50 000
Property, plant and equipment	85 502	44 561
Mineral properties	3 649 084	3 639 084
Total non-current assets	3784586	3733645
Total assets	9315042	6771 647
LIABILITIES
Current liabilities
Trade and other payables	105 722	130 027
Provisions	7520
Total current liabilities	113 242	130 027
Total liabilities	113 242	130 027
Net assets	9 201 800	6 641 620
EQUITY
Issued Capital	9 323 574	5 673 722
Reserves	1 905 260	1895886
Accumulated losses	(2027034)	(927988)
Total equity	9 201 800	6 641 620

Condensed consolidated statement of changes in equity
$\mbox{For the half-year ended 31 December 2006}$

	Share capital	Reserves Hotelyn Mutual Compo lle alle ran 1998 - S ourten y Transfera or Teacrye Accumulated -Reseave Losses	Total Attributable to equity holders of the parent
	J.	III B Á.	\$
Balance at 1 July 2005	5220	(6.651)	(1431)
Share based payments
Exchange differences arising on translation of foreign operations		Historia (Historia d Human a sa
Net income recognised directly in equity
Profit (Loss) for the period		Maria Maria Maria Ma (183.571)	(183 571)
Total recognised income and expense			(183 571)
Issue of shares	3.000.000		3 000 000
Conversion of options into shares
Share issue costs	(280.361)		(280361)
Balance at 31 December 2005	2724859	(190 222)	2 534 637

Balance at 1 July 2006	5673722	1894574	1.512	11695886	(927.988)	6 641 620
Share based payments		All Second		4332400		189 000
Exchange differences arising on translation of foreign operations			$-3294$			32 174
Net income recognised directly in equity
Profit (Loss) for the period					(1.099.046)	(1099046)
Total recognised income and expense						(877872)
Issue of shares	3 600 000					3 600 000
Conversion of options into shares	323 400	1323.400
Share issue costs	(273,548)	and Rom		114600		(161948)
Balance at 31 December 2006	9323574	187577	.33.486	UULLED 905-26903	(2.027.034)	9 201 800

$\hat{\mathcal{L}}$

Condensed Consolidated cash flow statement

For the half-year ended 31 December 2006

	31 December 2006 \$	31 December 2005 S
Cash flows from operating activities Payments to suppliers and employees	(1076350)	(174149)
Net cash used in operating activities	(1076350)	(174149)
Cash flows from investing activities Payments for mineral leases Payments for property, plant and equipment	(10000) (3755)	(11010)
Interest received Proceeds from sale of property, plant and equipment Other	78 338 50 000 (6000)	37 900
Net cash provided by investing activities	74 783	26890
Cash flows from financing activities Borrowings (repaid)/from related parties Proceeds from issues of shares and other equity securities Payment for share issue costs	3 600 000 (129882)	(71220) 3 000 000 (250 494)
Net cash provided by financing activities	3 470 118	2678286
Net increase in cash and cash equivalents	2 468 551	2 531 027
Cash and cash equivalents at the beginning of the half-year Effects of exchange rate changes on cash and cash equivalents held in foreign currency	3 015 374 (3.904)	21 081
Cash and cash equivalents at end of half-year	5 480 021	2 552 108

MONARO MINING NL Notes to the financial statements 31 December 2006

ī. Basis of preparation

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and Accounting Standard AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-vear financial report does not include all the notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

Except where indicated otherwise, all amounts are presented in Australian dollars.

$\overline{2}$ . Significant accounting policies

The condensed financial statements have been prepared under the historical cost convention, except where applicable, for the revaluation of mineral sales and certain financial instruments. The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the company's 2006 annual financial report for the year ended 30 June 2006, unless otherwise described herein.

$\overline{3}$ . Segment Information

During the year the consolidated entity operated predominantly in one business segment that consisted of exploration, development and production of hydrocarbons. Geographically, the group operates in Australia and Central Asia. Offices are maintained in Australia and in Central Asia where operations comprise the operations of Monaro Mining NL. Segment accounting policies are the same as the consolidated entity's policies described in Note 2. Segment results are classified in accordance with their use within geographic segments regardless of legal entity ownership.

Half year 2006

	Australia	Central Asia
Revenue
Mineral sales
Other revenue	136 245
Inter-segment revenue
Total Segment revenue	136 245
Segment Result	(539833)	(559 213)

Half year 2005

	Australia	Central Asia
Revenue
Mineral sales
Other revenue	43 132
Inter-segment revenue
Total Segment revenue	43 132
Segment Result	(143523)	(40048)

MONARO MINING NL Notes to the financial statements 31 December 2006

$\overline{4}$ . Unusual transactions included in results for the half-year

	Half-year
	2006 S	2005 S
Loss for the half-year before income tax includes the following items that are unusual because of their nature, size or incidence:
Expenses Exploration expenditure written off	400 260	108.605

$5.$ Issuances of equity securities

The following equity securities were issued during the half-year to raise working capital for the Company.

On 10 November 2006 an option holder converted 600,000 June 2007 options into ordinary shares by payment of 40 cents each raising \$240,000.

On 10 November 2006 an option holder converted 600.000 June 2007 options into ordinary shares by payment of 60 cents each raising \$360,000.

On 18 December 2006, the Company allotted 2 million ordinary shares at an issue price of \$1.50 raising \$3,000,000 before costs. Costs associated with the capital raising amounted to \$273,548. Of these costs \$111,600 was satisfied by the allotment of 200,000 Options which expire on 31 December 2008 and are exercisable into ordinary shares by payment of \$1.75 each. These Options have been valued using the Binomial Tree Option Calculator with regard to an in accordance with ASIC guidance.

On 18 December 2006, the Company allotted 500,000 Options to a consultant for financial public relations services. The Options expire on 31 December 2008 and are exercisable into ordinary shares by payment of \$1.75 each. These Options have been valued at \$189,000 using the Binomial Tree Option Calculator with regard to an in accordance with ASIC guidance.

MONARO MINING NL Notes to the financial statements 31 December 2006

6. Contingencies and commitments

		∑onsolidated		. овизаот
	2006	2005	2006	2005
Contingent liabilities			200000000000000000000000000000000000000
Contingent assets	$\begin{array}{c}\n 32300 \ -32300\n \end{array}$		$\begin{array}{c}\n 32300 \ -32300\n \end{array}$ *********

In the event that service contracts with executives are terminated early then the Company may become liable for payments in lieu of notice. In relation to the McRobbie contract this comprises 2 months or approximately \$32,300. In the case of the Rampe contract this amount is not presently quantifiable. There are no other contingent liabilities arising from service contracts with executives.

Pursuant to an Agreement to acquire uranium and gold exploration licences in the Kyrgyz Republic settled on 30 January 2006 a further 2,000,000 fully paid ordinary shares will be issued upon the grant of a mining licence and all mining, environmental and export approvals for a uranium mining operation on one of the projects. The Company applied for and was granted a waiver from Listing Rule 7.3.2. Pursuant to the terms of an approval at a General Meeting of Shareholders held on 11 January 2006. These shares may be issued no later than 36 months after the date of the meeting.

Pursuant to an Agreement dated 20 September 2006 with Hapsburg Exploration Pty Ltd to acquire a number of exploration licences prospective for uranium, gold and base metals in Australia, the Company made a nonrefundable initial payment of \$10,000. On successful grant of at least four applications. Monaro will make a payment of \$90,000 to Hapsburg. On successful grant of all of the applications, Monaro will issue fully paid shares in Monaro Mining NL to the value of \$100,000 and 500,000 share purchase options at an exercise price of \$1.20 with a term of four years. In the event that any one such application is not granted, the number of shares and options to be issued will be reduced by \$10,000 and 50,000 share purchase options respectively.

Pursuant to a Farm in Agreement dated 1 November 2006 with Ironbark Gold Limited on Exploration Licence EL 6381 Captains Flat Project, fronbark Gold is able to earn a 75% interest in the project subject to it meeting amongst other conditions, all expenditure commitments for the next 2 years. Ironbark has paid a non-refundable opportunity payment of \$50,000 and will manage all exploration activities.

Commitments for expenditure

Commitments for exploration expenditure do not vary materially from those reported in the 2006 Financial Statements. The exploration commitments reflect the minimum expenditure to meet the conditions under which the properties are granted or such greater amounts that have been contractually committed. These commitments may vary from time to time, subject to approval by the grantor of titles or by variation of contractual agreements. The expenditure represents potential expenditure which may be reduced by entering into sale, joint venture or relinquishment of the interests and may vary depending upon the results of exploration. Should expenditure not reach the required level in respect of each area of interest, the Consolidated Entity's interest could be either reduced or forfeited.

$\overline{7}$ . Subsequent events

On 13 February 2007, an option holder converted 600,000 June 2007 options into ordinary shares by payment of 60 cents each raising \$360,000.

A further 270,250 listed options expiring 31 July 2007 have been exercised by holders since the end of the half year by payment of \$1.20 each raising a total of \$324,300.

On 2 March 2007, 50,000 unlisted consultant options expiring on 31 December 2008 with an exercise price of \$1.75 each were issued. Upon exercise, these options convert to a fully paid share and a 3 year option with an exercise price of \$2.50 each. These options were issued for no consideration.

Other than as stated in this note, the Directors are not aware of any other matters or circumstances at the date of this report, other than those referred to in this report, that have significantly affected or may significantly affect the operations, the results of the operations or the state of affairs of the Consolidated Entity in subsequent financial vears.