PATERSON RESOURCES LTD — Interim / Quarterly Report 2014

Mar 12, 2014

ELYSIUM RESOURCES LIMITED

A BN 4 5 1 1 5 5 9 3 0 0 5

INTERIM FINANCIAL STATEMENTS 2013

For the Half-Year Ended 31 December 2013

Directors' Report 1
Auditor's Independence Declaration 4
Consolidated Statement of Comprehensive Income 5
Consolidated Statement of Financial Position 6
Consolidated Statement of Changes in Equity 7
Consolidated Statement of Cash Flows 8
Notes to the Financial Statements 9
Directors' Declaration 13
Independent Auditor's Review Report 14

E L Y S I U M R E S O U R C E S L I M I T E D D I R E C T O R S ' R E P O R T

Your directors present their report on the consolidated entity consisting of Elysium Resources Limited and the entities it controlled at the end of or during the half year ended 31 December 2013 (Elysium, Group or Consolidated Entity).

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Directors

The following persons were directors of the Group during the half year and up to the date of this report:

Maxim Carling – Director Michael Tilley – Non-Executive Chairman Mark Ohlsson – Non-Executive Director

Review of Operations

The principal activity of the Group during the course of the financial period was mineral exploration.

The net loss of the Group for the half year ended 31 December 2013 was $639,158 (2012: $537,715).No dividends were paid and the directors have not recommended the payment of a dividend.

On 30 August 2013 Elysium announced an off-market takeover bid under Chapters 6 to 6C of the Corporations Act 2001 (Cth) for all of the issued ordinary fully paid shares and options in Burraga Copper Limited ("Burraga"). The Offer closed with 99% acceptances. Elysium subsequently proceeded to a compulsory acquisition of the remaining shares. As a result Burraga is now fully owned by Elysium.

Burraga is an unlisted Australian public company that owns three contiguous exploration licences totalling 183 sq kms in the Lachlan Fold Belt of New South Wales. The exploration licences include the historic Lloyds Copper Mine, the Hackneys Creek gold deposit and the Lucky Draw gold mine all of which have produced copper and gold.

Exploration Activities

NSW

EL6463- (100%) EL6874-(100%) EL7975- (100%)

An Induced Polarisation (IP) survey was commenced over the historical Lloyds Mine area in October, approximately 55% of the planned IP survey was completed prior to the holiday period with the most northerly line being over the historical Lloyds Mine. Additionally a shorter intermediate line was completed over the main tailings dump to assess whether the basement of the tailings could be mapped.

As announced on 28th November 2013, chargeability trends have been associated with conductors identified by an airborne electromagnetic (EM) survey. Two prominent trends are now mapped for in excess of 1.5km, the NE trending high converging with the NS trending high 1.5-2.0 km south of the Lloyds Mine. The anomalies vary up to 200m in width and appear to be stronger at depth, beyond any old workings mapped in the area. Soil sampling results received added to the surface geochemical anomalies that highlight the potential of the area south of Lloyds and in particular the chargeability high at approximately 734,100mE, 6,238,300mN; further sampling to infill this area and better define the anomaly to the west is warranted.

The chargeability high trending north-easterly is stronger and more continuous but seems to have little support from the surface soil sample results. The soil sampling that exists over this trend is older and sampling protocol is not well documented. Apart from the one historical drill-hole collared at the southern-most end which may have drilled through the anomaly, the four drill-holes drilled along the trend collared from the western side were drilled using RC methods and the holes have no record of down-hole surveying.

Burraga's experience through its drill campaigns in 2011 and 2012 shows that RC holes drilled towards the east deviate considerably, steepening or even drilling back towards the west; therefore, even the

E L Y S I U M R E S O U R C E S L I M I T E D D I R E C T O R S ' R E P O R T

minimal drilling over the SE chargeability trend is likely to have not penetrated the strongest parts of the chargeability high. Burraga drilled several shallow holes late in 2013 near the NE high demonstrating the intense level of alteration that has taken place in the area; ZHD-008 was drilled close to the historical hole collared at approximately 734,500mE, 6,237,600mN showing massive pyrite and minor galena from surface. The NE trending high is contained within significant bounding structures mapped at surface, similar to the structural setting hosting Lloyds. The trend also hosts the Sprague's Mine, the second most prominent historical mine in the area after Lloyds. The high at the extreme NE end of the trend and just before a terminating cross-structure seems to form a blind target with no surface soil sampling support and no evidence of historical workings.

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The short IP line over the tailings seemed to map the base of tailings remarkably well indicating that the basement is deeper than that assumed for the resource estimate and suggesting that a greater tailings tonnage is present; this would conform with historical estimates of tailings tonnages. Upon return of the survey crew several more lines will be run to create a grid, mapping the resistivity difference between the loose tailings and natural rock surface allowing for an update to the tailings resource estimate.

Planning is currently underway to firm up drill targets and resource updates in 2014; work to include:

• collect further soil samples, infilling areas of interest and replacing historical data deemed suspect
• collate surface mapping over the IP trends to identify areas for potential drilling
• continue IP survey to the north of Lloyds to complete proposed survey and to identify further areas for potential drilling
• complete survey over tailings to map basement via resistivity and provide a resource update

The Company is targeting, on both the north trending western, and NE trending eastern chargeability highs, what may be VMS style Lloyds repeats. Lloyds was mined in late 1800's and early 1900s where the average copper grade recovered over the period was reported at greater than 4% copper.

Indonesia – Malang Project

In August the Company agreed to terms of a Heads of Agreement with PT GataSumberDaya to earn 67.5% of the Malang Project on East Java in Indonesia by advancing the exploration efforts at the copper and gold targets and subsequently, through a new Australian subsidiary called Malang Resources Pty Ltd has lent funds to Malang Resources in an amount of US$200,000 on the condition that Malang Resources agrees to subsequently advance these funds to Gata for the purposes of securing the exploration permit (IUP) from the relevant Indonesian government authority.

A program of work to be carried out by Elysium's Indonesian partners, PT GataSumbarDaya commenced in December, entailing reconnaissance mapping over the entire 100 sq km lease with more detailed project scale mapping over the 4 identified prosects. Significant soil, stream and rock chip sampling is planned to consolidated earlier reconnaissance work which identified the potential for large scale porphyry targets in the region. The exploration program is expected to be carried out throughout the second quarter of 2014. Airborne geophysics will be considered following the current work program with the aim of identifying drill-ready targets by the second half of 2014.

A community engagement program has also commenced with local personnel being employed to supplement the exploration crews. Community meetings have identified the need for fresh water to be piped to the village nearest the project which the Company is seeking to address and ensure the full support for the exploration effort continues.

WA

Horseshoe South Project (100%) EL52/2569

No activity

E L Y S I U M R E S O U R C E S L I M I T E D D I R E C T O R S ' R E P O R T

Redmond Project (100%) E70/4073

No activity

Auditor's Independence Declaration

The auditor's independence declaration under Section 307C of the Corporations Act 2001 for the half year ended 31 December 2013 has been received and is set out on page 4.

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Signed in accordance with a resolution of Directors

Mr Max Carling Director

13 March 2014 Sydney New South Wales

AUDITOR'S INDEPENDENCE DECLARATION

As lead auditor for the review of the financial report of Elysium Resources Limited for the half-year ended 31 December 2013, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
• (b) any applicable code of professional conduct in relation to the review.

This declaration is in respect of Elysium Resources Limited and the entities it controlled during the period.

4

Sydney, NSW M D Muller 13 March 2014 Partner

E L Y S I U M R E S O U R C E S L I M I T E D C O N S O L I D A T E D S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E

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For the half year ended 31 December 2013

		31 December2013$	31 December2012$
RevenueInterest		4,379	15,084
Administration		(421,639)	(377,854)
Occupancy costs		(34,841)	(35,358)
Depreciation		(7,983)	-
Employment costs (including directors)		(179,074)	(139,587)
Loss Before Income Tax		(639,158)	(537,715)
Income tax expense		-	-
Loss for the Half Year		(639,158)	(537,715)
Other comprehensive income
Other comprehensive income for the half year,
net of tax		-	-
Total comprehensive loss for the half-year		(639,158)	(537,715)
Earnings per share for loss attributable to the
ordinary equity holders of the Group
Basic loss per share (cents)	3	(0.109)	(0.102)

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

E L Y S I U M R E S O U R C E S L I M I T E D C O N S O L I D A T E D S T A T E M E N T O F F I N A N C I A L P O S I T I O N As at 31 December 2013

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	Note	31 December2013$	30 June2013$
CURRENT ASSETS
Cash and cash equivalents		200,708	521,049
Trade and other receivables		29,918	108,392
TOTAL CURRENT ASSETS		230,626	629,441
NON-CURRENT ASSETS
Property, plant & equipment	4	61,350	53,557
Available for sale financial assets	5	61,500	-
Exploration and Evaluation Expenditure	6	4,371,035	2,210,658
TOTAL NON-CURRENT ASSETS		4,493,885	2,264,215
TOTAL ASSETS		4,724,511	2,893,656
CURRENT LIABILITIES
Trade and other payables		478,168	89,696
TOTAL CURRENT LIABILITIES		478,168	89,696
TOTAL LIABILITIES		478,168	89,696
NET ASSETS		4,246,343	2,803,960
EQUITY
Contributed equity		6,553,984	4,472,443
Reserves		110,500	110,500
Accumulated losses		(2,418,141)	(1,778,983)
TOTAL EQUITY		4,246,343	2,803,960

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

E L Y S I U M R E S O U R C E S L I M I T E D C O N S O L I D A T E D S T A T E M E N T O F C H A N G E S I N E Q U I T Y

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For the half year ended 31 December 2013

2012	ContributedEquity$	Accumulated Losses$	OptionReserve$	Total$
Balance at 1 July 2012Total comprehensive loss for theperiod ended 31 December 2012Transactions with owners in theircapacity as owners:	3,602,789-	(813,359)(537,715)	--	2,789,430(537,715)
Shares issued during the period to31 December 2012	196,708	-	-	196,708
Options cost	-	-	110,500	110,500
Balance as at 31 December 2012	3,799,497	(1,351,074)	110,500	2,558,923
	ContributedEquity$	AccumulatedLosses$	OptionReserve$	Total$
2013
Balance at 1 July 2013	4,472,443	(1,778,983)	110,500	2,803,960
Total comprehensive loss for theperiod ended 31 December 2013Transactions with owners in theircapacity as owners:	-	(639,158)	-	(639,158)
Deemed cost of reverse acquisition
of Elysium Resources Limited (Note10)	2,081,541	-	-	2,081,541

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

E L Y S I U M R E S O U R C E S L I M I T E D C O N S O L I D A T E D S T A T E M E N T O F C A S H F L O W S For the half year ended 31 December 2013

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	31 December2013$	31 December2012$
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers	-	-
Payments to suppliers and employeesInterest received	(200,633)4,379	(513,227)15,084
NE TCASH OUTFLOWS FROM OPERATING ACTIVITIES	(196,254)	(498,143)
CASH FLOWS FROM INVESTING ACTIVITIESExploration and evaluation expenditurePayments for Plant & equipmentNet cash acquired on acquisition of subsidiary	(252,789)(14,150)142,852	(202,566)(11,777)-
NET CASH OUTFLOWS FROM FINANCING ACTIVITIES	(124,087)	(214,343)
CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issues of shares	-	24,913
NET CASH INFLOWS FROM FINANCING ACTIVITIES	-	24,913
NET DECREASE IN CASH HELD	(320,341)	(687,573)
Cash and cash equivalents at the beginning of the halfyear	521,049	1,230,723
CASH AND CASH EQUIVALENTS AT THE END OF THE HALFYEAR	200,708	543,150

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

1. STATEMENT OF ACCOUNTING POLICIES

(a) Basis of Preparation

These general purpose interim financial statements for the half-year reporting period ended 31 December 2013 have been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

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These half yearly financial statements do not include all the notes of the type normally included in the annual financial statements. Accordingly, these statements are to be read in conjunction with the annual reports for the year ended 30 June 2013 of Elysium Resources Limited and Burraga Copper Limited and any public announcements made by the Consolidated Entity during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

(b) Principles of Consolidation and Reverse Acquisition

Elysium Resources Limited is listed on the Australian Securities Exchange. Elysium Resources Limited completed the legal acquisition of Burraga Copper Limited including its wholly owned subsidiaries Burraga Management Pty Ltd and BC Exploration Pty Ltd on 1st December 2013.

Burraga Copper Limited was deemed to be the acquirer for accounting purposes as it has obtained control over the operations of the legal acquirer. Accordingly, the consolidated financial statements of Elysium Resources Limited have been prepared as a continuation of the financial statements of Burraga Copper Limited. Burraga Copper Limited (as the deemed acquirer) has accounted for the acquisition of Elysium Resources Limited from 1st December 2013. The comparative information from 1st July 2012 to 31st December 2012 presented in the consolidated financial statements is that of Burraga Copper Limited.

The impact of the reverse acquisition on each of the primary statements is as follows: Consolidated Statement of Comprehensive Income:

• The statement for the half year to 31st December 2013 comprises 6 months of Burraga Copper Limited and 1 month of Elysium Resources Limited.
• The statement for the half year to 31st December 2012 comprises 6 months of Burraga Copper Limited.

Consolidated Statement of Financial Position:

• The consolidated statement of financial position at 31st December 2013 represents both Burraga Copper Limited and Elysium Resources Limited as at that date.
• The consolidated statement of financial position at 30th June 2013 represents Burraga Copper Limited as at that date.

Statement of Changes in Equity

• The consolidated statement of changes in equity for the half year ended 31st December 2013 comprises Burraga Copper Limited's equity balance at 1st July 2013, its loss for the year, and transactions with equity holders for 6 months. It also comprises Elysium Resources Limited's transactions with equity holders and its loss in December 2013 and the equity balances of Burraga Copper Limited and Elysium Resources Limited at 31st December 2013.
• The consolidated statement of changes in equity for the half year ended 31st December 2012 comprises 6 months of Burraga Copper Limited's changes in equity.

Cash Flow Statement

• The consolidated cash flow statement for the half year ended 31st December 2013 comprises the cash balance of Burraga Copper Limited at 1st July 2013, the cash transactions for the 6 months (6 months for Burraga Copper Limited and 1 month for Elysium Resources Limited) and the closing cash balance of Burraga Copper Limited and Elysium Resources Limited at 31st December 2013.
• The consolidated cash flow statement for the half year ended 31st December 2012 comprises 6 months of Burraga Copper Limited's cash transactions.

E L Y S I U M R E S O U R C E S L I M I T E D N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 3 1 D e c e m b e r 2 0 1 3

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

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Going Concern

For the half year ended 31 December 2013, the Group recorded a loss of $639,158. At 31 December 2013, the cash balance was $200,708.

As mentioned in note 9, on 27 February 2014 the Company reached an agreement to obtain additional funding of $3.6M from a placement of shares to institutional and sophisticated shareholders. The first stage of this fundraising relating to $900,000 is subject to overseas regulatory approval and due imminently and the balance is due following shareholder and regulatory approval.

The Directors have prepared forecasts which confirm that, after taking account of all these additional funds, the Company and the Group will be able to continue as a going concern for the foreseeable future. Should regulatory or shareholder approval not be obtained to raise these funds or amounts are not raised from alternative fundraising, there is a material uncertainty as to whether the Company and Group will continue as a going concern and therefore realise it assets and settle its liabilities in the normal course of business at the amounts stated in the financial statements.

2. Segment Reporting

The Consolidated Entity's sole operations are within the mineral exploration industry within Australia.

The Group has applied AASB 8 Operating Segments. AASB 8 requires a "management approach" under which segment information is presented on the same basis as that used for internal reporting purposes.

Given the nature of the Group, its size and current operations management does not treat any part of the Group as a separate operating segment. Internal financial information used by the Group's decision makers is presented on a "whole of entity" manner without dissemination to any separately identifiable segments.

The Group managers operate to manage the business as a whole without any special responsibilities for any separately identifiable segments of the business.

Accordingly the financial information reported elsewhere in this financial report is representative of the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

3.	Loss per share	31.12.2013	HALF YEAR31.12.2012
	Weighted average number of ordinary shares outstanding duringthe year used in calculating basic EPS	585,155,122	526,082,708
	Loss used to calculate basic and dilutive EPS	(639,158)	(537,715)
	Basic loss per share (cents per share)	(0.109)	(0.102)

E L Y S I U M R E S O U R C E S L I M I T E D N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 3 1 D e c e m b e r 2 0 1 3

4.	Property, Plant and Equipment		HALF YEAR
		31.12.2013	30.06.2013
	Plant and Equipment
	At cost	99,163	83,386
	Accumulated depreciation	(37,813)	(29,829)
	Total Plant Equipment	61,350	53,557
	Total Property, Plant and Equipment	61,350	53,557
5.	Available for Sale Financial Assets	31.12.2013	30.06.2013
	Listed investment at fair value 1	61,500	-
		61,500	-
	At beginning of period	-	-
	Acquisitions on Consolidation	61,500	-
	At end of period	61,500	-

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1Fair value of investments in listed corporations is assessed as the bid price on the Australian Securities Exchange at the close of business on balance date.

6.	Exploration and Evaluation Expenditure	31.12.2013	30.06.2013
	Exploration and evaluation expenditure	4,371,035	2,210,658
		4,371,035	2,210,658
	At beginning of period	2,210,658	1,727,972
	Exploration expenditure incurred	252,520	482,686
	Expenditure capitalised on reverse takeover1	1,907,857	-
	At end of period	4,371,035	2,210,658

1Fair value of Elysium's exploration assets at date of reverse takeover.

7. Contingent Liabilities

The Directors are not aware of any contingent liabilities as at 31 December 2013.

8. Dividends

No dividends were paid or proposed during the period.

The Group has no franking credits available at 31 December 2013.

9. Events occurring after the reporting period

There has not arisen in the interval between the end of the period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Group to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years other than the following:-

On 27 February 2014 the Company reached an agreement to obtain additional funding of $3.6M from a placement of shares to institutional and sophisticated shareholders. The first stage of this fundraising relating to $900,000 is unconditional and due imminently, subject to overseas regulatory approval, and the balance is due following shareholder approval.

10. Reverse Acquisition

On 1 December 2013 Elysium acquired the share capital of Burraga Copper Limited by issuing 6.5 Elysium shares for each Burraga share and one Elysium share for each Burraga option held by the Burraga Shareholders and Optionholders. Details of the deemed purchase consideration and net assets acquired are as follows:-

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Deemed purchase consideration of shares transferred by theowners of Burraga Copper Limited	$2,081,541
	Fair value$
Assets and liabilities excluding exploration assets	173,954
Exploration assets recognised at the date of takeover	1,907,587
	2,081,541

11. Related Party Transactions

The Group has an office rental agreement with Carling Capital Partners a director related entity of Mr Max Carling. Under the agreement the Group pays $4,000 per month rent which is at normal market rates.

The Group uses the accounting services of Graham Abbott Associates, a firm owned and operated by Graham Abbott, who was a Director of Burraga Copper Limited until his resignation on 5 December 2013. The arrangement is a fee for service arrangement based on hourly rates for professional and administrative attendances. The rates for fees charged are within the range of rates charged by smaller accounting firms for services to company clients.

A total of $12,252 was paid during the 6 months ended 31 December 2013(2012: $7,914) by the Group to Graham Abbott Associates.

During the 6 months ended 31 December 2013, as a result of the completion of the reverse takeover, a success fee of $250,000 was payable by Burraga to Carling Capital Partners, a director related entity of Mr Max Carling. All these fees remained payable as at 31 December 2013.

In the directors' opinion:

(a) the financial statements and notes set out on pages 5 to 12 are in accordance with the Corporations Act 2001, including:

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• (i) Complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
• (ii) Giving a true and fair view of the entity's financial position as at 31 December 2013 and of its performance for the half-year ended on that date, and
• (b) 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.

This declaration is made in accordance with a resolution of the directors.

Mr Max Carling Director

13 March 2014 Sydney, New South Wales

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of Elysium Resources Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Elysium Resources Limited ("the company") which comprises the consolidated statement of financial position as at 31 December 2013, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory notes and the directors' declaration, for the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors' Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 31 December 2013 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the company, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the company, would be in the same terms if given to the directors as at the time of this auditor's review report.

INDEPENDENT AUDITOR'S REVIEW REPORT

(continued)

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 Elysium Resources Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and
• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Material Uncertainty Regarding Continuation as a Going Concern

Without modifying our conclusion, we draw attention to Note 1 (Going concern basis of accounting) in the half-year financial report, which indicates that the consolidated entity incurred a net loss of $639,158 during the half-year ended 31 December 2013 and, as of that date, the consolidated entity's had a deficiency of net current assets of $247,542.

These conditions, along with other matters as set forth in Note 1 (Going concern basis of accounting), indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity's ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

HLB Mann Judd M D Muller Chartered Accountants Partner

Sydney, NSW 13 March 2014