ORBMINCO LIMITED — Interim / Quarterly Report 2012

Mar 7, 2012

AUSTRALIAN-AMERICAN MINING CORPORATION LTD ABN 99 073 155 781

HALF YEAR FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011

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AUSTRALIAN-AMERICAN MINING CORPORATION LTD AND CONTROLLED ENTITIES

DIRECTORS’ REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

The Directors of Australian-American Mining Corporation Ltd (“Aus-Am” or “Aus-American” or “Consolidated Entity” or “Company”) submit herewith the interim financial report for the half-year ended 31 December 2011.

Directors

The names of directors of the Company in office during or since the end of the half-year are:

Jim Malone	-	Executive Chairman (Appointed 30 July 2008)
Denis Geldard	-	Executive Director (Appointed 29 January 2010)
Greg Barns	-	Non-Executive Director (Appointed 30 July 2008 - resigned 3 February 2012)
Simon Jackson	-	Non-Executive Director (Appointed 28 February 2011 – resigned 3 February 2012)
Don Falconer	-	Non-Executive Director (Appointed 28 February 2011)

All directors held office from the start of the financial year to the date of this report unless otherwise stated.

Operating results

The consolidated loss after tax for the reporting period was $3,298,514 (half-year ended 31 December 2010: loss of $4,090,501).

Review of operations

Overview

As at 31 December 2011, the Company owned a number of high quality assets - all located in low risk, mining friendly jurisdictions in the USA. They comprise:

• The La Paz REE project in Arizona. NI 43-101 and JORC compliant indicated and inferred resource of 128 million tonnes of REE (95.6 million pounds) grading 0.0371% (371ppm) with +16% HREE;

• The White Picacho pegmatite strategic metal project located in Arizona (lithium, rubidium, tantalum, and niobium);

• • The Rio Puerco uranium project in New Mexico. NI 43-101 and JORC compliant inferred resource of 11.3 million pounds U3O8 grading 0.09% (900ppm) at a 0.03% (300ppm) cut off grade;

• The Apex/Lowboy uranium project in Nevada. NI 43-101 and JORC compliant inferred resource of 1.5 million pounds U3O8 grading 0.07% (700 ppm) using a cut off grade 0.01% (100ppm);

• The Lone Star uranium JV (AIW 90%) in Texas, with a number of leases on prospective uranium properties with historic resources;

• The Apache Basin uranium project in Arizona;

• The San Marcos gold project in Arizona; and

• The Bernard gold project (AIW 90%) in Arizona.

The following activities occurred in the six month period ending 31 December 2011.

1. Advanced the La Paz REE project.

This project was discovered in 2010. In 2011, the Company the following occurred:

• Early stage exploration, mapping, sampling, and goechemistry;

• Further claims staked in surrounding area;

• 195 hole, 5,200 metre percussion drilling campaign completed;

• Initial metallurgical test work completed by Saskatchewan Research Council (“SRC”);

• Independent NI 43-101 completed;

• Maiden indicated and inferred resource announced;

• Independent Scoping Study commenced;

• Second phase diamond drilling programme commenced; and

• Second phase of metallurgical test work started.

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AUSTRALIAN-AMERICAN MINING CORPORATION LTD AND CONTROLLED ENTITIES

DIRECTORS’ REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

During the period the Company completed the initial metallurgical test work study and an Independent NI 43-101 report. The maiden indicated resource of 16.2 million tonnes at 373.4 ppm (using a 300 ppm cut off) for 12.1 million pounds (lbs) Rare Earth Elements (“REE”) and an inferred resource of 112 million tonnes at 371 .5 ppm (using a 300 ppm cut off) for 83.5 million pounds (lbs) REE was announced.

The total resource currently stands at 128.2 million tonnes at 371.5 ppm for 95.6 million pounds (lbs) REE.

Further, preliminary test work to date is most encouraging, with overall TREO (“Total Rare Earth Oxides“) recovery of 68.1% after concentration to an average grade of 1248 ppm.

A second stage metallurgical study commenced and a second phase diamond drilling programme commenced in the December quarter. Results of these studies and the drilling are pending and we expect to receive them in the first quarter of 2012.

2. Continued to advance the Company’s uranium projects.

During the half year an Independent NI 43-101 report was completed at the Rio Puerco uranium project. The comprehensive report confirmed the inferred resource of 11.3 million pounds grading 900ppm using a 300 ppm cut off, identified potential to increase the current resource and confirmed potential for insitu recovery (“ISR”) mining.

Other work performed during the quarter on the Company’s uranium projects included exploration and permitting work completed at Lone Star JV as well as continued project and property evaluation undertaken in Texas.

3. Advanced the San Marcos gold project.

During the period a second phase, 5 hole, 878 metre diamond drill programme and an Independent NI 43-101 report was completed.

4. Continued to advance the White Picacho specialty metals projects.

During the period a number of samples were sent to SRC for metallurgical/extractive test work which will commence this quarter; and a detailed report on the sampling programme carried out at the White Picacho property in 2011 has been prepared and is currently being reviewed by the Company.

5. Continued to pursue the strategy of seeking a North American listing.

During the period the Company advanced its efforts to be listed in North America in addition to its ASX listing. The Company is now trading ADR’s on the highest tier of the OTC market, OTC.QX–New York; (ticker: MNOMY). Leading market agency Standard and Poor’s has commenced coverage of the Company.

Subsequent events

On 3rd February 2012, the company announced it has signed a term sheet to raise new capital for the company totaling up to $3,420,000, consisting of;

1. A placement of ordinary shares priced at the then market price (5.8 cents),

2. Placement of unsecured convertible notes; and

3. A commitment to purchase ordinary shares for a 12 month period

The investment is provided by The Australian Special Opportunity Fund, LP, an institutional investment fund managed by The Lind Partners LLC; a New York City based, alternative asset Management Company. The facility will provide a maximum of $3,420,000 of funding to the company over 12 months.

An initial issue of 862,069 ordinary shares at A$0.058 per share was issued on 2 February 2012 to ASOF on execution of the term sheet. On 29 February 2012, the Company announced that it had issued a further 536,308 ordinary shares, 600,000 options exercisable at A$0.0595 per Option into Ordinary Shares on or before 1 March 2015, and a A$300,000 Convertible Security on signing of the final executed agreement. As a result, the initial tranche of $350,000 was received by the Company at the beginning of March 2012.

The funds will enable the company to continue the development of the La Paz Rare Earth project located in Arizona as well as the other company assets which include the White Picacho specialty metals (Li, Ta, Ni, Rb & Cs) project in Arizona, it’s various uranium projects and the San Marcos gold project, all located in mining friendly jurisdictions in the USA.

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AUSTRALIAN-AMERICAN MINING CORPORATION LTD AND CONTROLLED ENTITIES

DIRECTORS’ REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

The company also announced that regrettably, it has temporarily suspended its pursuit of a TSXV listing. The company has spent 12 months and considerable time and effort attempting to dual list on the TSX initially and then on the TSXV and received conditional listing status for the TSXV in December 2011 but continues to experience delays in gaining a full, unconditional listing.

As a result of these delays coupled with a falling share price the Company made the decision that rather than incur the uncertainty and ongoing costs of continuing this process, we will instead focus on developing our assets.

The Company will reassess the situation in a few months when hopefully market conditions have improved and we have received positive results of the test work study on our La Paz REE project; both events which should lead to an improved share price and market capitalization of our company.

Some consolation to this is the Company has recently gained admission to commence trading on the OTC.QX in New York, therefore fulfilled its goal of having a North American trading platform for investors from this region.

The Company also announced that Simon Jackson and Greg Barns have retired from the Board of Directors. The Board of the Company formed the view that faced with on-going difficult market conditions and no immediate TSXV listing, the size of the Board needed to be reduced. In addition to these Board changes Nerida Schmidt will step down as Company Secretary and Chief Financial Officer. This role will be filled by the Executive Chairman Jim Malone. We thank Nerida, Simon and Greg for their contribution to our company.

The Company recognizes that it needs to reduce overheads whilst continuing to develop projects as we head into uncertain times in 2012. We have recently managed to bring about changes to the budget resulting in a reduction in the Company “burn rate” to approximately $100,000 per month by March 2012 going forward and these measures, in conjunction with the new funding provided by Lind Partners, will enable the company to operate throughout the 2012 year and beyond whilst continuing to develop our highly prospective resource projects.

Auditor’s independence declaration

The lead auditor’s independence declaration under section 307C of the Corporation Act 2001 is set out on page 5 for the half-year ended 31 December 2011 which forms part of this report.

Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act 2001.

On behalf of the Directors:

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James Malone

Executive Chairman

Perth, 8 March 2012

COMPETENT PERSON

The review of exploration activities and results contained in this report is based on information compiled by Mr. D Geldard,Executive Director of Australian-American Mining Corporation Ltd. Mr. Geldard is a Member of the Australasian Institute of Mining and Metallurgy He has significant experience relevant to the style of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code).

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Grant Thornton Audit Pty Ltd ABN 94 269 609 023

10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration

To The Directors of Australian-American Mining Corporation Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Australian-American Mining Corporation 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 AUDIT PTY LTD Chartered Accountants

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J W Vibert Partner – Audit & Assurance

Perth, 8 March 2012

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

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

NOTE CONTINUING OPERATIONS Interest Income Other income Unrealised foreign exchange gain/(loss) Depreciation and amortisation Insurance Occupancy & administration expense Project expenditure Marketing and promotion Salary, wages, professional fees Travel Share based payments expense 8 Bad debts written off Property, plant and equipment written off Loss before income tax Income tax expense Loss from continuing operations Loss for the period attributable to members of Australian-American Mining Corporation Ltd Other Comprehensive Income Revaluation of available for sale securities Foreign currency translation Total comprehensive income attributable to members of Australian-American Mining Corporation Ltd EARNINGS/(LOSS) PER SHARE: Basic earnings/(loss)per share (cents per share) Diluted earnings/(loss) per share (cents per share)	CONSOLIDATED ENTITY 31 DECEMBER 2011 $ 31 DECEMBER 2010 $
	30,070 31,937 118,856 615,742 87,595 - (17,509) (16,715) (21,231) (2,215) (225,832) (297,915) (2,118,971) (1,728,204) (32,103) - (712,924) (726,786) (218,085) (124,878) (144,320) (1,841,467) (2,610) - (41,450) -
	(3,298,514) (4,090,501)
	- -
	(3,298,514) (4,090,501)
	(3,298,514) (4,090,501)
	(105,000) 2,040,000 102,297 (672,103)
	(3,301,217) (2,722,604)
	(4.90) (4.97)
	(4.90) (4.97)

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011

NOTE CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other financial assets Property, plant and equipment Mineral properties in exploration and evaluation phase Available for sale securities TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred Tax liability TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 7 Reserves Accumulated losses TOTAL EQUITY	CONSOLIDATED 31 DECEMBER 2011 $ 30 JUNE 2011 $
	1,013,075 4,265,078 61,299 46,847 9,827 155,040
	1,084,201 4,466,965
	23,525 - 81,258 119,889 6,967,596 6,853,784 1,215,000 1,320,000
	8,287,379 8,293,673
	9,371,580 12,760,638
	175,612 390,748 19,653 36,679
	195,265 427,427
	771,756 771,756
	771,756 771,756
	967,021 1,199,183
	8,404,559 11,561,455
	52,018,705 52,018,704 2,847,404 2,705,787 (46,461,550) (43,163,036)
	8,404,559 11,561,455

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

Consolidated entity Balance at 1 July 2010 Total comprehensive income Transactions with owners in their capacity as owners: Shares issued during the period Share issue costs Share based payments Balance at 31 December 2010 Balance at 1 July 2011 Total comprehensive income Transactions with owners in their capacity as owners: Shares issued during the period Share issue costs Share based payments Balance at 31 December 2011	SHARE CAPITAL OPTIONS RESERVE FOREIGN CURRENCY TRANSLATION AVAILABLE FOR SALE SECURITIES ACCUMULATED LOSSES TOTAL
	42,592,222 1,571,581 (403,197) - (36,308,981) 7,451,625
	- - (672,103) 2,040,000 (4,090,501) (2,722,604)
	9,472,732 - - - - 9,472,732 (497,228) - - - - (497,228) 249,554 1,591,913 - - - 1,841,467
	51,817,280 3,163,494 (1,075,300) 2,040,000 (40,399,482) 15,545,992
	52,018,704 3,193,494 (1,207,707) 720,000 (43,163,036) 11,561,455
	- - 102,297 (105,000) (3,298,514) (3,301,217)
	1 - - - - 1 - - - - - - - 144,320 - - - 144,320
	52,018,705 3,337,814 (1,105,410) 615,000 (46,461,550) 8,404,559

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

FOR THE HALF-YEAR ENDED 31 DECEMBER 2011
		CONSOLIDATED
		31 DECEMBER 2011 $ 31 DECEMBER 2010 $
CASH FLOWS FROM OPERATING ACTIVITIES	NOTE
Payments to suppliers and exploration		(3,337,399) (2,656,910)
Other receipts		- 58,003
Net cash (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES		(3,337,399) (2,598,907)
Interest received		30,070 31,937
Interest paid		- -
Payment for property, plant equipment		(17,493) (7,329)
Proceeds from refund of security deposits		- 31,477
Net cash (used in) / provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES		12,577 56,085
Proceeds from issue of shares and other equity securities
		1 8,763,332
Proceeds from share auction		- 159,400
Proceeds from borrowings		- 200,000
Repayment of borrowings		- (200,000)
Proceeds from issue of convertible notes		- 400,000
Payment for share issue costs		- (497,229)
Net cash provided by / (used in) financing activities		1 8,825,503
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash and cash equivalents at the beginning of the year
		(3,324,821) 6,282,681
		4,265,078 849,044
Effects of exchange rates on cash and cash equivalents Cash and cash equivalents at the end of the period		72,818 (4,498)
		1,013,075 7,127,227

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

1. Basis of preparation

The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standard AASB 134 Interim Financial Reporting , Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting .

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2011 and any public announcements made by Australian-American Mining Corporation Ltd during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 .

The half-year financial report does not include full disclosures of the type normally included in an annual financial report.

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

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements except for the adoption of the new and revised Accounting Standards, as set out in note 2 below.

Going concern

The funding received after year end (refer Note 6) supports the directors’ opinion that there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable and fund future exploration.

2. Reporting basis and conventions

From 1 July 2011, the Company has adopted the following Standards for the reporting periods beginning on or after 1 July 2011:

Amendments to AASB 134 Interim Financial Reporting

The amendments clarified certain disclosures relating to events and transactions that are significant to an understanding of changes in the Group's circumstances since the last annual financial statements. The Group's interim financial statements as of 31 December 2011 reflect these amended disclosure requirements, where applicable.

3. Dividends

There have been no dividends paid or declared in the period or in the previous reporting period.

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NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

4. Operating segments

Segment Information

Identification of reportable segments

The Company 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 assessing performance and determining the allocation of resources.

The Company’s principal activity at this point of time is mineral exploration.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics.

Basis of accounting for purposes of reporting by operating segments

Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Company.

(i) Segment performance

During the six months ended 31 December 2011 the Group’s principal activity is mineral exploration. The group operates in Australia and the United States of America. Offices are maintained in Australia and the USA where operations comprise the operations of Uranium King Corporation and its subsidiaries. Segment results are classified in accordance with their economic characteristics regardless of legal Entity ownership.

2011 Revenue Interest income Other Total segment revenue Segment result 2010 Revenue Interest income Other Total segment revenue Segment result	AUSTRALIA $ UNITED STATES $ ELIMINATIONS TOTAL $
	30,070 - 30,070 55,003 63,853 118,856
	85,073 63,853 148,926
	(653,203) (2,341,670) (303,641) (3,298,514)
	AUSTRALIA $ UNITED STATES $ ELIMINATIONS TOTAL $
	31,937 - - 31,937 615,742 - - 615,742
	647,679 - 647,679
	(2,983,798) (1,965,736) 859,036 (4,090,498)

(ii) Major customers

Due to the nature of its current operations, the Company does not provide products and services.

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NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

5. Contingent liabilities and contingent assets

i ) Contracts for services of key management personnel

Details of service contracts with executives have been included in the Remuneration Report section of the Directors’ Report in the 30 June 2011 Financial Statements. In the event that service contracts are terminated early the Company may become liable for payments in lieu of notice.

liable for payments in lieu of notice.
	CONSOLIDATED
	31 DECEMBER 2011 $ 31 DECEMBER 2010 $
Contingent liabilities	- 49,198
Contingent assets	- -

ii) The Rio Puerco, Apex, Lowboy and Church Rocks projects areas carry a yellow cake royalty, to a maximum equivalent of a 5% on a claim by claim basis. In all cases the royalty does not exceed 5% over any project.

6. Events subsequent to the reporting period

There have been no significant events since the end of the period other than:

On 3 February 2012, the Company announced changes to the Board and management of the Company with Greg Barnes and Simon Jackson resigning from the Board of Directors and Ms Nerida Schmidt resigning as Company Secretary. Mr James Malone was appointed Company Secretary.

Also on 3rd February 2012, the Company announced it had signed a term sheet to raise new capital for the Company totalling up to $3,420,000, consisting of;

1. A placement of ordinary shares priced at the then market price (5.8 cents),

2. Placement of unsecured convertible notes; and

3. A commitment to purchase ordinary shares for a 12 month period.

The investment was to be provided by The Australian Special Opportunity Fund, LP, (“ASOF”) an institutional investment fund managed by The Lind Partners LLC; a New York City based, alternative asset Management Company. The facility will provide a maximum of $3,420,000 of funding to the company over 12 months. An initial issue of 862,069 ordinary shares at A$0.058 per share was issued on 2 February 2012 to ASOF on execution of the term sheet. On 29 February 2012, the Company announced that it had issued a further 536,308 ordinary shares, 600,000 options exercisable at A$0.0595 per Option into Ordinary Shares on or before 1 March 2015, and a A$300,000 Convertible Security on signing of the final executed agreement . As a result, the initial tranche of $350,000 was received by the Company at the beginning of March 2012. The remaining $2,770,000 is available under the facility upon mutual consent of the investor and the Company.

.

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NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

7. Issued capital

. Issued capital
67,342,328 fully paid ordinary shares (30 June 2011: 336,709,607) Share issue expenses	CONSOLIDATED 31 DECEMBER 2011 $ 30 JUNE 2011 $
	53,514,606 53,514,605
	(1,495,901) (1,495,901)
	52,018,705 52,018,704

The company does not have a limited amount of authorised capital and issued shares do not have a par value.

Fully paid ordinary shares Balance at beginning of financial year Consolidation of shares Shares allotted during the year Share issue costs Ordinary fully paid shares at end of year	CONSOLIDATED AND COMPANY 31 DECEMBER 2011 NUMBER 31 DECEMBER 2011 $ 30 JUNE 2011 NUMBER 30 JUNE 2011 $
	336,709,607 52,018,704 157,354,563 42,592,222 (269,367,281) - - - 2 1 179,355,044 9,947,285 - - - (520,803)
	67,342,328 52,018,705 336,709,607 52,018,704

Fully paid ordinary shares carry one vote per share and carry the right to dividends. Partly paid ordinary shares entitle the holder to vote, participate in dividends and proceeds on a winding up in proportion to the number of and amounts paid on the shares held.

Partly paid ordinary shares Balance at beginning of financial year Movements Balance at end of financial year	CONSOLIDATED AND COMPANY 31 DECEMBER 2011 NUMBER 31 DECEMBER 2011 $ 30 JUNE 2011 NUMBER 30 JUNE 2011 $
	- - 5,000,000 5,000
	- - (5,000,000) (5,000)
	- - - -

a) The following shares were issued during the reporting period:

(i) On 29 September 2011, the Company announced the completion of a 1 for 5 share consolidation, as approved by shareholders at a General Meeting held on 9 September 2011.

(ii) On 21 November 2011, 2 shares were issued as a result of the exercise of two 50c options raising $1.

b) The following share options to take up ordinary shares were issued during the reporting period:

(i) On 9 September 2011, 2,000,000 share options were issued with exercise prices of $0.10 and expiry dates of 31 December 2012.

The options are exercisable on issue, hold no voting or dividend rights and are not transferable.

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NOTES TO THE FINANCIAL STATEMENTS

FOR THE HALF YEAR ENDED 31 DECEMBER 2011

8. Share based payments

A total of $144,320 has been recorded for the six months ended 31 December 2011 as a Share based payments expense, and is comprised of the following:

Issue of 2,000,000 options with exercise prices of $0.10 and expiring 31 December 2012 issued to directors on 9 September 2011.	CONSOLIDATED 31 DECEMBER 2011 $
	144,320
	144,320

The fair values of options granted during the period were calculated using either the Black-Scholes option pricing model or determined by reference to market price if available. The fair values of options calculated using the Black-Scholes option pricing model were calculated by applying the following inputs:

Weighted average exercise price:	$0.10
Weighted average life of the option:	1.31 years
Expected share price volatility:	120%
Risk-free interest rate:	4.75%

Historical volatility has been the basis for determining share price volatility as it is assumed that this is indicative of future movements.

The weighted average fair value of those equity instruments, determined by reference to market price, was $0.05.

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DIRECTORS DECLARATION

The directors of the company declare that:

1. The financial statements and notes as set out on pages 6 to 14 are in accordance with the Corporations Act 2001 including:

2. (a) Complying with Accounting Standard AASB 134: Interim Financial Reporting; 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 for the half year ended on that date.

4. In the directors’ opinion 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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James Malone

Director

Dated this 8[th] day of March 2012

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Grant Thornton Audit Pty Ltd ABN 94 269 609 023

10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

Independent Auditor’s Review Report

To the Members of Australian-American Mining Corporation Limited

We have reviewed the accompanying half-year financial report of Australian-American Mining Corporation 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 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 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

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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auditor of Australian-American Mining Corporation 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 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 Australian-American Mining Corporation 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 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 AUDIT PTY LTD Chartered Accountants

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J W Vibert Partner – Audit & Assurance

Perth, 8 March 2012