RIEDEL RESOURCES LIMITED — Interim / Quarterly Report 2012

Mar 7, 2012

FINANCIAL REPORT FOR THE HALF YEAR ENDED

31 DECEMBER 2011

CONTENTS

CORPORATE DIRECTORY
DIRECTORS' REPORT
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
CONDENSED STATEMENT OF FINANCIAL POSITION
CONDENSED STATEMENT OF CHANGES IN EQUITY
CONDENSED STATEMENT OF CASH FLOWS
CONDENSED NOTES TO AND FORMING PART OF THE ACCOUNTS 15
DIRECTORS' DECLARATION
INDEPENDENT AUDITOR'S REVIEW REPORT

CORPORATE DIRECTORY

DIRECTORS

Bruce Franzen Andrew Childs Wolfgang Zimmer lan Tchacos Jeffrey Moore

COMPANY SECRETARY Bruce Franzen

REGISTERED & PRINCIPAL OFFICE Suite 1

45 Ord Street WEST PERTH WA 6005

Telephone: (08) 9226 0866 Facsimile: (08) 9486 7375

AUDITORS

PKF Mack and Co Level₂ 35 Havelock Street WEST PERTH WA 6005

DIRECTORS' REPORT

Your Directors submit the financial report of the consolidated entity for the half-year ended 31 December 2011.

DIRECTORS

The names of the directors in office at any time during or since the end of the period are:

lan Tchacos Jeffrey Moore Bruce Franzen Andrew Childs Wolfgang Zimmer

Bruce Franzen also holds the position of company secretary.

OPERATING RESULTS

The net loss of the company for the financial period after provision for income tax was \$987,600.

REVIEW OF OPERATIONS

MARYMIA PROJECT

Recent exploration results released to ASX from explorers with tenements adjacent to Riedel Resources Limited's Marymia exploration tenements, including Sipa Resources Limited, Ventnor Resources Limited and Lodestar Resources Limited, have greatly enhanced the potential for the discovery of significant mineralisation in the Company's Marymia Project area (See Figure 1 for project location).

GEOLOGICAL SETTING

Recent exploration results reported by Sipa and Ventnor highlighted the discovery of significant sedimentary-hosted (the Enigma Prospect) and structurally-controlled copper mineralisation (Thaduna and Green Dragon deposits) in Yerrida Group sedimentary rocks.

The Yerrida Basin is interpreted to be in faulted contact with the sedimentary and volcanic rock package belonging to the Bryah Basin, host to the rich DeGrussa copper-gold deposits, further illustrating the strongly mineralised nature of the entire stratigraphic sequence in the relatively underexplored Yerrida and Bryah Basins.

In addition to the prospective geology hosting the known DeGrussa and Enigma copper mineralisation, the deposits are also characterised by proximity to the regionally significant Jenkin Fault. This combination of favourable geology and structure may represent a highly-prospective exploration target area within a north-east trending, mineralised tectono-stratigraphic corridor which trends into the southwestern portions of Riedel's Marymia tenements (see Figure 2 for regional geological map).

DIRECTORS' REPORT

Figure 1: Marymia Project - Location Map

Figure 2: Marymia Project - Regional Geological Map

DIRECTORS' REPORT

The exploration potential of Riedel's tenements is further illustrated by significant RAB and RC drilling programmes being carried out by Lodestar Minerals Limited, either underway or planned, in close proximity to Riedel's tenements to:

• Test VTEM geophysical targets, and: $\bullet$
• Test geochemical targets along strike from Sipa's Enigma prospect which trend towards Riedel's exploration licences (see Figure 3 for location of geochemical anomalies).

EXPLORATION COMPLETED

Exploration completed during the six months included detailed geological mapping, geochemical soil sampling and rock chip sampling. The mapping and soil sampling focused on previously unexplored areas that are highly prospective for base metals and gold mineralisation and the rock chip sampling focused on an area prospective for iron ore and base metals mineralisation. This area has also not been previously explored. An area of 45 square kilometres in the south western part of the project area was mapped at 1:10,000 scale. The results from the mapping are currently being evaluated and 559 soil samples were collected from the same area on 400m x 100m centres and submitted for multielement assay. Results are pending. The mapping and sampling programmes are designed to test for the presence of extensions to the copper geochemical anomalies previously identified by Sipa Resources and Lodestar Minerals adjacent to the tenement (see Figure 3).

A further 1028 soil samples were collected on 400m x 100m centres within the area considered most prospective for copper mineralisation in the northern half of the project area. These samples have also been submitted for multi-element assay and results are pending.

Nineteen rock chip samples were collected from the eastern part of the project area to test for iron ore mineralisation within the interpreted Frere Formation. This formation has been shown to host significant iron ore mineralisation in other locations to the south and east of the tenement and was only recognized recently as possibly extending into the project area. Results are pending and further work is planned to better define the area of potential mineralisation.

Figure 3: Marymia Project - Geological Map highlighting geochemical anomalies

DIRECTORS' REPORT

CHARTERIS CREEK PROJECT

During November Exploration Licence 45/2763 was granted. The 131km² tenement is located approximately 45km north of Nullagine and 50km south-east of Marble Bar in the Pilbara Region of Western Australia.

Although there has only been limited exploration previously carried out in the tenement, there are numerous proximal gold, base metals and iron ore deposits within prospective rock formations that extend into the Charteris Creek exploration licence (see Figure 4 for geological setting and metal occurrences and deposits).

GEOLOGICAL SETTING

E45/2763 is located within a complex group of Paleo-Archaean to Neo-Archaean rock formations from the Warrawoona Group, Kelly Group, granitoids, Soanesville Group, Gorge Creek Group and the Fortescue Group.

Figure 4: Charteris Creek Project - Geological Map highlighting known mineral occurrences and deposits

Mineral deposit and mineralisation types that the Company will target in forthcoming exploration programmes include:

• Copper-lead-zinc and copper-molybdenum occurrences associated with a granodiorite intrusion have been identified in the south-east part of the tenement. These form part of a larger cluster of base metal and specialty-metal occurrences related to stockwork mineralisation in the Gobbos Granodiorite.
• Laconia Resources' Lennons Find deposit (Inferred Mineral Resource of 853,000 tonnes @ 7.7% Zn, 1.8% Pb, 0.7% Cu and 115g/t Ag) is located approximately one kilometre along strike to the north of E45/2763. Initial reconnaissance work by Riedel confirms that the prospective Warrawoona Group host rocks extend into the tenement.

DIRECTORS' REPORT

• Numerous small but very high grade gold deposits are located adiacent to the tenement in Warrawoona Group rocks and several structures that control, or are associated with these gold deposits extend into E45/2763.
• The McPhee Creek Iron Ore deposit (Indicated and Inferred Mineral Resource of 260 million tonnes @ 56% Fe) is located approximately 8km along strike to the south of E45/2763 in rocks belonging to the Gorge Creek Group. Regional mapping indicates that the prospective Gorge Creek Group extends further north into E45/2763.

EXPLORATION COMPLETED

An initial reconnaissance trip has been completed to confirm the local geology, access and logistical issues and to aid in the planning of initial exploration programs that will commence in the first half of 2012.

BURKINA FASO GOLD PROJECTS

On 15 November 2011, the Company announced that is has reached agreement with Golden Rim Resources Limited ("Golden Rim", ASX: GMR) for the right to acquire 100% interests in five highly prospective exploration permits in Burkina Faso (see Figure 5 for tenement locations).

TECHNICAL HIGHLIGHTS

The permits (Galgouli South, Gonsin, Keri, Moaga and Tagou) encompass a total area of $\bullet$ 1,076 $km^2$ , and highlight:

-major regional structures;

-favourable Birimian Greenstone Belt host rocks;

-areas of artisanal mining, and;

• -high prospectivity for the discovery of significant gold deposits with numerous 'gold-in-soil' anomalies and rock chip samples up to 65g/t Au being identified.
• Multiple drill targets have been identified within each permit and several permits lie along strike $\bullet$ from major gold deposits (Konkera 3.1M oz Au) and operating gold mines (Youga 1.1M oz Au and Kalsaka 0.6M oz Au).
• The permit package offers Riedel a compelling opportunity to establish a significant position in $\bullet$ the fastest growing gold producing region in the world.
• Riedel has already concluded site visits and technical and legal due was completed in mid December 2011.
• Burkina Faso contains 22% of West Africa's Birimian Greenstone Belts compared to Ghana's $\bullet$ 19% and Mali's 10% but lags these countries in gold production due to lack of exploration investment to date.
• Immediate commencement of field programmes directed by Exploration Manager Ed Turner in $\bullet$ Burkina Faso is planned following completion of transaction.
• Burkina Faso appointments of: $\ddot{\bullet}$

In-Country Representative, Mohammed Munkailah;

exploration management team, and:

preferred contractors to support the planned activities for the current field season.

The permits exhibit excellent geological attributes, including:

DIRECTORS' REPORT

• -major regional structures;
• -favourable host rocks within Birimian Greenstone Belts;
• -areas of artisanal mining;
• -numerous significant 'gold-in-soil' anomalies and rock chip samples up to 65.5 g/t Au, and;
• -the permits are considered highly prospective for the discovery of large gold deposits with several permits being located along strike from major gold deposits including (Konkera -3.1M oz Au) and operating gold mines (Youga - 1.1M oz Au and Kalsaka - 0.6M oz Au).

Figure 5: Tenement Locations

Cursory Golden Rim exploration programmes have already identified multiple drilling targets within each permit.

On 15 December 2011, the Company announced it has satisfactorily completed its legal and technical due diligence review for the right to acquire 100% interests in these five exploration permits located in Burkina Faso from Golden Rim Resources Limited for a combination of shares and cash. Site visits were already undertaken by Company personnel in late September 2011. The preparation of a Formal Agreement is currently underway. Shortly, the Company is also planning to prepare and lodge a Notice of General Meeting, to seek shareholder approval for the issue of consideration shares to Golden Rim Resources Limited which is necessary to complete the transaction.

In anticipation of a favourable outcome to its due diligence studies, the Company has acted to identify and secure the services of all key technical personnel necessary to immediately implement exploration projects in Burkina Faso post completion of transaction.

DIRECTORS' REPORT

Competent Person's Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Ed Turner, who is a Member of The Australian Institute of Geoscientists. Mr Turner has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Exploration Targets, Mineral Resources and Ore Reserves'. Mr Turner consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

CORPORATE

On 13 July 2011, the Company granted 1,500,000 unlisted options to Ed Turner – Exploration Manager as executive incentives for nil consideration, the terms being exercisable at \$0.30 on or before 30 June 2014. The options must be exercised within 60 days of ceasing employment with the Company or they will lapse.

Pursuant to a General Meeting of Shareholders held on 14 July, 2011 and the Company Performance Rights Plan, the following issues of securities to related parties were approved by shareholders as follows:

Holder	Number of Performance Rights	Exercise Price
Jeffrey Moore	2,000,000	27 cents
	2,000,000	36 cents
	2,000,000	45 cents
Bruce Franzen	666,667	27 cents
	666,667	36 cents
	666,666	45 cents

Zen Magnolia Pty Ltd (Bruce Franzen is a Director and Shareholder) was issued 86,660 ordinary fully paid shares.

All resolutions put to the meeting were passed unanimously on a show of hands.

On 13 April 2011, Riedel announced that it had entered through its wholly owned subsidiary AuDAX Minerals Pty Ltd, into a conditional agreement for the disposal of a 100% interest in Cheritons East Tenement EL77/1223 to Silverstone Minerals Pty Ltd, a wholly owned subsidiary of Silver Stone Resources Limited. The Agreement is conditional upon ASX granting Silver Stone conditional approval to be admitted to the Official List of the ASX, subject only to completion of the Agreement occurring and the satisfaction of such other conditions as may reasonably be within Silver Stone's control. This transaction was completed on 11 August 2011.

On 30 September 2011, the Company announced the release 2,950,000 securities from Escrow.

On 30 November, 2011, the Company held its Annual General Meeting of Shareholders at the Citigate Hotel, Perth. All resolutions put to the meeting were passed unanimously on a show of hands.

During the reporting period, 10,000 listed options were exercised at 20c each into shares to raise \$2,000.

EVENTS SUBSEQUENT TO REPORTING DATE

On 17 January, 2012, the Company issued a Notice of General Meeting of Shareholders to be held on 22 February, 2012 at which shareholders must consider a sole resolution to approve and issue consideration shares to Golden Rim Resources Limited as part consideration for the proposed acquisition of 100% of Golden Rim's right, title, and interest by the Company in five prospective exploration permits in Burkina Faso. The issue of the Notice of General Meeting of Shareholders was subsequent to the execution of a Formal Agreement which occurred on 16 January, 2012 between the

DIRECTORS' REPORT

Company and Golden Rim in respect of the proposed acquisition and tenements. As at 31 December 2011, this transaction had not been completed.

There are no other matters or circumstances that have arisen since the end of the financial period that have significantly affected or may significantly affect the operations of the company, the results of those operations or the state of affairs of the company, in future years.

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration under s 307C of the Corporations Act 2001 is set out on page 10 for the half year ended 31 December 2011.

Signed in accordance with a resolution of the Board of Directors.

Bruce Franzen Executive Director

Date: 7 March 2012

Chartered Accountants & Business Advisers

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF RIEDEL RESOURCES LIMITED

I declare that, to the best of my knowledge and belief, during the half year ended 31 December 2011 there has been:

• a) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and
• no contraventions of any applicable code of professional conduct in relation to the review. a)

PRF MACK & CO

PKF MACK & CO

N A CALDER PARTNER

7 MARCH 2012 WEST PERTH, WESTERN AUSTRALIA

Tel: 61 8 9426 8999 | Fax: 61 8 9426 8900 | www.pkf.com.au PKF Mack & Co | ABN 17 830 241 067 2nd Floor, 35 Havelock Street | West Perth | Western Australia 6005 | Australia PO Box 609 | West Perth | Western Australia 6872 | Australia

PKF Mack & Co is a member of the PKF International Limited network of legally independent member firms. PKF Mack & Co is also a member of the PKF Australia Limited
national network of legally independent firms each trading other individual member firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation. 10

CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Note	31 December 2011 \$	31 December 2010 \$
Interest revenue Other income	4(a) 4(a)	104,143 147,954	4,867
Administration expenses Depreciation and amortisation expense Employee benefits expense Exploration expenditure incurred Write-off of exploration expenditure Other expense		(274, 190) (8, 897) (469, 022) (223, 847) (263, 725) (16)	(16, 470)
Loss before income tax	4(b)	(987, 600)	(11,603)
Income tax expense
Loss for the period	4(b)	(987, 600)	(11,603)
Other comprehensive income Other comprehensive income (net of tax)
Total comprehensive loss for the period	4(b)	(987, 600)	(11, 603)
Basic loss per share (cents per share)		(0.02)
Diluted loss per share (cents per share)		(0.02)

The accompanying condensed notes form part of these financial statements.

CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

	Note	31 December 2011 \$	30 June 2011 \$
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Prepayments Financial assets	5 6 6	3,053,754 88,888 18,790 85,000	4,317,723 238,200 19,999
TOTAL CURRENT ASSETS		3,246,432	4,575,922
Property, plant and equipment Exploration and development expenditure	8 $\overline{7}$	198,070 5,948,213	11,976 5,680,285
TOTAL NON-CURRENT ASSETS		6,146,283	5,692,261
TOTAL ASSETS		9,392,715	10,268,183
CURRENT LIABILITIES Trade and other payables Provisions		415,561 26,471	411,387 7,712
TOTAL CURRENT LIABILITIES		442,032	419,099
TOTAL LIABILITIES		442,032	419,099
NET ASSETS		8,950,683	9,849,084
EQUITY Issued capital Option reserve Retained earnings	9	10,447,266 383,575 (1,880,158)	10,450,602 291,041 (892, 559)
TOTAL EQUITY		8,950,683	9,849,084

The accompanying condensed notes form part of these financial statements.

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

	Issued Capital	Option Reserve	Accumulated Losses	Total
				\$
Balance at 1 July 2011	10,450,602	291,041	(892, 559)	9,849,084
Loss for the period			(987, 600)	(987, 600)
Other comprehensive income
Total comprehensive loss for the period			(987, 600)	(987, 600)
Transactions with owners, recorded directly in equity
Issue of share capital	12,400			12,400
Issue of options		92,534		92,534
Less: share issue costs	(15, 735)			(15, 735)
Balance at 31 December 2011	10,477,266	383,575	(1,880,158)	8,950,683
Balance at 1 July 2010	100		(4, 775)	(4, 675)
Loss for the period			(11, 603)	(11,603)
Other comprehensive income
Total comprehensive loss for the period			(11,603)	(11, 603)
Transactions with owners, recorded directly in equity
Issue of share capital	650,000			650,000
Less: share issue costs
Balance at 31 December 2010	650,100		(16, 378)	633,722

The accompanying condensed notes form part of these financial statements.

CONDENSED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2011

	Note	31 December 2011	31 December 2010 \$
Cash Flows from Operating Activities Payments to suppliers and employees Interest received		(651, 999) 119,902	31,638 5,337
Net cash (used in)/provided by operating activities		(532,097)	36,975
Cash Flows from Investing Activities Proceeds from disposal of exploration tenements Purchase of plant and equipment Payments for exploration and evaluation Reimbursable expenditure to ADX Energy Ltd		110,000 (194, 989) (801, 259)	(250,000)
Net cash used in investing activities		(886, 248)	(250,000)
Cash Flows from Financing Activities Proceeds from issue of shares Proceeds from issue of options Reversal of application for shares Payments for share issue costs		2,000 168,211 (15, 835)	650,000 (115,000) (238, 915)
Net cash provided by financing activities		154,376	296,085
Net (decrease)/increase in cash held		(1, 263, 969)	83,060
Cash and cash equivalents at beginning of financial year		4,317,723	115,355
Cash and cash equivalents at end of financial year	5	3,053,754	198,415

The accompanying condensed notes form part of these financial statements

NOTE 1: REPORTING ENTITY

Riedel Resources Limited (the "Company") is a Company domiciled in Australia.

The address of the Company's registered office is Suite 1, 45 Ord Street, West Perth WA 6005. The interim consolidated financial statements of the Company as at and for the six months ended 31 December 2011 comprise the Company and its subsidiaries (together referred to as the "Group" or "consolidated entity" and individually as "Group entities") and the Group's interest in associates and jointly controlled entities.

The Group primarily is involved in mining and exploration activity.

The financial statements of the Company as at and for the half year ended 31 December 2011 are available upon request.

NOTE 2: BASIS OF PREPARATION

Statement of compliance a)

These interim consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

This condensed half-year report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as in the full financial report.

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 Riedel Resources Limited and its subsidiaries during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

These interim financial statements were approved by the Board of Directors on 6 March 2012.

$\mathbf{b}$ Basis of preparation

The interim report has been prepared on a historical cost basis, except for the revaluation of certain financial instruments to fair value. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted.

For the purpose of preparing the interim report, the half-year has been treated as a discrete reporting period.

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 2011 annual financial report for the financial year ended 30 June 2011, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

$\mathbf{C}$ Significant accounting judgments and key estimates

The preparation of the interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expenses. Actual results may differ from these estimates.

NOTE 2: BASIS OF PREPARATION (CONT)

c) Significant accounting judgments and key estimates (continued)

In preparing these interim financial statements, significant judgment made by management in applying the Company's accounting policies and key sources of estimation were the same as those that were applied to the financial statements as at and for the year ended 30 June 2011.

$d)$ Going concern

The half year financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. The consolidated entity incurred a net loss after tax of \$987,600 for the period ended 31 December 2011 (31 December 2010: \$11.603).

The ability of the consolidated entity to continue to pay its debts as and when they are due is dependent upon the consolidated entity successfully raising additional share capital and ultimately developing one of its mineral properties.

The Directors believe it is appropriate to prepare these accounts on a going concern basis because:

• the Directors have an appropriate plan to raise additional funds as and when it is required. In $\bullet$ light of the consolidated entity's current exploration projects, the Directors believe that any additional capital required can be raised in the market; and
• the Directors have an appropriate plan to contain certain operating and exploration expenditure $\bullet$ if appropriate funding is unavailable.

The accounts have been prepared on the basis that the consolidated entity can meet its commitments as and when they fall due and can therefore continue normal business activities, and the realisation of assets and liabilities in the ordinary course of business.

Adoption of new and revised Accounting Standards e)

In the half-year ended 31 December 2011, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2011.

It has been determined by the Group that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies.

The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2011. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies.

f) Operating segments

From 1 July 2009, operating segments are identified and segment information disclosed on the basis of internal reports that are regularly provided to, or reviewed by, the consolidated entity's chief operating decision maker which, for the consolidated entity, is the Board of Directors. In this regard, such information is provided using different measures to those used in preparing the statement of comprehensive income and statement of financial position. Reconciliations of such management information to the statutory information contained in the interim financial report have been included where applicable.

NOTE 3: OPERATING SEGMENTS

The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

Operating segments are identified by Management based on the mineral resource and exploration activities in Australia. Discrete financial information about each project is reported to the chief operating decision maker on a regular basis.

The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate.

The consolidated entity has only one operating segment identified and monitored by management based on exploration activities in Australia.

NOTE 4: LOSS FROM ORDINARY ACTIVITIES	31 December 2011 \$	31 December 2010 \$
(a) Other revenue
Interest revenue	104,143	4,867
Other Income	147,954
	252,097	4,867
(b)Expenses
Administration expenses	274,189	16,470
Depreciation and amortisation expense	8,897
Employee benefits expense	469,022
Exploration expenditure incurred	223,847
Write-off of exploration expenditure	263,725
Other expense	16
	1,239,696	16,470
NOTE 5: CASH AND CASH EQUIVALENTS	31 December 2011 S	30 June 2011 S
Cash at Bank	3,053,754	4,317,723
NOTE 6: TRADE AND OTHER RECEIVABLES
Accrued interest	28,136	43,895
Option subscription funds held by share registry		168,211
GST refundable	60,752	26,094
	88,888	238,200
Prepayments	18,790	19,999

31 December 2011 \$	30 June 2011 \$
5,680,285
	5,421,004
593,699	259,281
(62,046)
(263, 725)
5,948,213	5,680,285

• Relates to the disposal of a 100% interest in Cheritons East Tenement EL 77/1223 to $(i)$ Silverstone Minerals Pty Ltd, a wholly owned subsidiary of Silver Stone Resources Limited, for the following consideration:-
• 500,000 fully paid ordinary shares in Silver Stone Resources Limited at fair value of 20 $\bullet$ cents; and
• \$100,000 cash. $\bullet$

NOTE 8: PROPERTY, PLANT & EQUIPMENT

During the period, the consolidated entity acquired property, plant & equipment assets to the value of \$194,989 (2010: \$14,032).

NOTE 9: ISSUED CAPITAL	31 December 2011	30 June 2011
(a) Share Capital
Issued and paid up capital – consisting of ordinary shares	11,004,199	10,991,700
Less: Costs of issue	(556, 933)	(541,098)
	10,447,266	10,450,602

(b) Movements in ordinary share capital	Number of shares	\$
Opening balance at 1 July 2011	58,208,100	10,450,602
Issue of shares on 26/07/2011 Options exercised - issue of shares 11/07/2011 Less: capital issue costs	86,660 10,000	10,399 2,000 (15, 735)
Closing balance at 31 December 2011	58,304,760	10,447,266
Opening balance at 1 July 2010	100	100
Seed capital shares issued on 30/09/2010 Shares issued under Prospectus dated 12	6,500,000	650,000
November 2010 on 20/01/2011 Shares issue as consideration for the acquisition	26,708,000	5,341,600
of AuDAX Minerals Pty Ltd on 20/01/2011 Less: capital issue costs	25,000,000	5,000,000 (541, 098)
Closing balance at 30 June 2011	58,208,100	10,450,602

NOTE 10: SHARE BASED PAYMENTS

During the period, 86,660 fully paid ordinary shares in the Company were issued to Zen Magnolia Pty Ltd, a company associated with Bruce Franzen (director) for corporate advisory services. The shares were valued at the share price on the date of grant \$0.12 with a valuation of \$10,399.

During the period, 1,500,000 unlisted options were issued (Issue 1) to an employee as executive incentives for nil consideration, the terms being exercisable at \$0.30 on or before 30 June 2014. The options must be exercised within 60 days of ceasing employment with the Company or they will lapse.

Also during the period, 8,000,000 performance rights were issued (Issue 2) under the Company Performance Rights Plan to Jeffrey Moore (Managing Director) and Bruce Franzen (Director) as incentive to align the directors' interests with company objectives. The following issues of securities to related parties were approved by shareholders as follows:

Holder	Number of Performance Rights	Exercise Price
Jeffrey Moore	2,000,000	27 cents
	2,000,000	36 cents
	2,000,000	45 cents
Bruce Franzen	666,667	27 cents
	666,667	36 cents
	666,666	45 cents

The performance rights are exercisable at the conversion price determined at the grant date. The terms and conditions relating to these performance rights including the parameters used to value them are as follows:

	Issue 1	Issue 2
Underlying security spot price	\$0.1115	\$0.135
Exercise price	\$0.30	\$0.27-\$0.45
Volatility	75%	75%
Risk free rate	4.42%	5.05%
Grant date	12/07/2011	26/07/2011
Expiration date	30/06/2014	25/07/2014
Expiration period (years)	2.97 yrs	3 yrs
Number of options	1,500,000	8,000,000
Valuation per option/performance right	\$0.032	\$0.031-\$0.047
Valuation per tranche	\$48,000	\$309,333

The fair value of services received in return for share options granted is measured using the Binomial Options Pricing model.

NOTE 11: RELATED PARTY TRANSACTIONS

Other than as disclosed below, arrangements with related parties continue to be in place. For details on these arrangements, please refer to the 2011 Annual Report.

(a) Transactions with key management personnel

Key management personnel continue to receive remuneration in the form of short term benefits and post employment benefits.

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated

NOTE 12: EVENTS SUBSEQUENT TO REPORTING DATE

On 17 January, 2012, the Company issued a Notice of General Meeting of Shareholders to be held on 22 February, 2012 at which shareholders must consider a sole resolution to approve and issue consideration shares to Golden Rim Resources Limited as part consideration for the proposed acquisition of 100% of Golden Rim's right, title, and interest by the Company in five prospective exploration permits in Burkina Faso. The issue of the Notice of General Meeting of Shareholders was subsequent to the execution of a Formal Agreement which occurred on 16 January, 2012 between the Company and Golden Rim in respect of the proposed acquisition and tenements. As at 31 December 2011, this transaction had not been completed.

There are no other matters or circumstances that have arisen since the end of the financial period that have significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity, in future years.

NOTE 13: CONTINGENT ASSETS AND LIABILITIES

The company is not aware of any contingent assets or liabilities.

NOTE 14: INCORPORATION OF MAURITIUS SUBSIDIARY

On 18th November 2011, the company incorporated a new subsidiary, Riedel (Burkina Faso) Limited, in the Republic of Mauritius. This is a 100% owned subsidiary of Riedel Resources Limited. Minimal activity has occurred up to the period to reporting date.

DIRECTORS' DECLARATION

The directors of the company declare that:

• $1.$ The financial statements and notes, of the consolidated entity are in accordance with the Corporations Act 2001 including:
• complying with Accounting Standards AASB 134: Interim Financial Reporting and the $(a)$ Corporations Regulations 2001; and
• giving a true and fair view of the consolidated entity's financial position as at 31 December $(b)$ 2011 and of its performance for the half year ended on that date; and
• $\overline{2}$ . 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.

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

Bruce Franzen Executive Director

Date: 7 March 2012

Chartered Accountants & Business Advisers

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF RIEDEL RESOURCES LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Riedel Resources Limited (the Company) which comprises the condensed statement of financial position as at 31 December 2011, the condensed statement of comprehensive income, condensed statement of changes in equity and condensed statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors' declaration of the consolidated entity comprising the Company and the entities it controlled at 31 December 2011, or 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 the Australian Accounting Standards and the Corporations Act 2001 and for such internal controls 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 2011 and its performance for the half year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporation Regulations 2001. As the auditor of Riedel Resources 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 enguiries, 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.

Tel: 61 8 9426 8999 | Fax: 61 8 9426 8900 | www.pkf.com.au PKF Mack & Co | ABN 17 830 241 067 2nd Floor, 35 Havelock Street | West Perth | Western Australia 6005 | Australia PO Box 609 | West Perth | Western Australia 6872 | Australia

PKF Mack & Co is a member of the PKF International Limited network of legally independent member firms, PKF Mack & Co is also a member of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF Mack & Co does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

Independence

Chartered Accountants & Business Advisers

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. In accordance with the Corporations Act 2001, we have given the directors' of the company a written Auditor's Independence Declaration.

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-vear financial report of Riedel 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 2011 and of its performance for the half-year ended on that date; and
• complying with Accounting Standard AASB 134 Interim Financial Reporting and the $(b)$ Corporations Regulations 2001.

Material Uncertainty Regarding Continuation as a Going Concern

Without qualifying our conclusion, we draw attention to Note 2(d) in the financial report which states that the consolidated entity incurred a net loss of \$(987,600) during the half year ended 31 December 2011 (31 December 2010: \$(11,603) and had negative operating cashflow of \$(532,097) (31 December 2010: positive \$36,975). These conditions, along with other matters as set forth in Note 2(d), indicate the existence of a material uncertainty which 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, and at the amounts stated in the financial report.

PRR MACK & CO

PKF MACK & CO

N A CALDER PARTNER

7 MARCH 2012 WEST PERTH. WESTERN AUSTRALIA

Tel: 61 8 9426 8999 | Fax: 61 8 9426 8900 | www.pkf.com.au PKF Mack & Co | ABN 17 830 241 067 2nd Floor, 35 Havelock Street | West Perth | Western Australia 6005 | Australia PO Box 609 | West Perth | Western Australia 6872 | Australia

PKF Mack & Co is a member of the PKF International Limited network of legally independent member firms. PKF Mack & Co is also a member of the PKF Australia Limited
national network of legally independent firms each trading other individual member firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.