RIEDEL RESOURCES LIMITED — Interim / Quarterly Report 2013

Mar 14, 2013

FINANCIAL REPORT FOR THE HALF YEAR ENDED

31 DECEMBER 2012

CONTENTS

CORPORATE DIRECTORY 1
DIRECTORS' REPORT 2
AUDITOR'S INDEPENDENCE DECLARATION 8
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME 9
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION10
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY11
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS12
CONDENSED CONSOLIDATED NOTES TO AND FORMING PART OF THE ACCOUNTS13
DIRECTORS' DECLARATION20
INDEPENDENT AUDITOR'S REVIEW REPORT21

CORPORATE DIRECTORY

DIRECTORS

Jeffrey Moore Ed Turner Andrew Childs Ian Tchacos

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 Level 4 35 Havelock Street WEST PERTH WA 6005

DIRECTORS' REPORT

Your Directors submit the financial report of Riedel Resources Limited (the Company) and controlled entities (the consolidated entity) for the half-year ended 31 December 2012.

DIRECTORS

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

Ian Tchacos Jeffrey Moore Ed Turner (appointed 5 December 2012) Andrew Childs Bruce Franzen (resigned 31 January 2013)

Bruce Franzen also holds the position of company secretary.

OPERATING RESULTS

The net loss of the consolidated entity for the financial period after provision for income tax was $753,190 (2011: $987,600).

REVIEW OF OPERATIONS

WESTERN AUSTRALIA

MARYMIA PROJECT

A first pass drill test program consisting of 129 holes for 6,826 metres of RAB and aircore drilling was completed at Marymia. The drilling tested targets 12, 13, 14, 16, 17, 18, 19, 24 and 25 (see Figure 1 and Table 1 for summary of drilling completed). These targets were delineated during a comprehensive review of all project data during the period and considered mostly to give positive copper (Cu), gold (Au) or nickel (Ni) results. 24 priority targets were identified during the review.

Target ID	No of	Hole ID's	Metres drilled
	Holes
12	21	MMAC001 - MMAC021	799
13	14	MMAC022 – MMAC035	1,530
14	28	MMAC036 – MMAC042	659
		MMRB001 – MMRB021
16	12	MMAC068 – MMAC079	977
17	2	MMAC080 – MMAC081	105
18	2	MMAC082 – MMAC083	101
19	2	MMAC084- MMAC085	125
24	28	MMRB022 – MMRB024	1,716
		MMAC043 – MMAC067
25	20	MMRB025 – MMRB044	814
Total =	129		6,826

DIRECTORS' REPORT

Figure 1: Marymia Project - RAB/aircore drilling completed

Composite sample results received for the four copper targets (12, 13, 14 and 16) returned many significant intersections averaging greater than 5 metres @ 100ppm Cu*.* All of the significant intersections in targets 12, 13 and 16 are hosted by Proterozoic-aged sediments. The host rocks in Target 14 are Archaean-aged felsic volcanics. The best intersections are listed below.

• Target 12:
  • 30m @ 228 ppm Cu from 5m in MMAC002 (including 5m @ 589 ppm Cu);
  • 29m @ 143 ppm Cu from 10m to end of hole in MMAC009 (including 5m @ 5.31 g/t Ag);
  • 25m @ 264 ppm Cu from 10m in MMAC015 (including 5m @ 534 ppm Cu).
• Target 13:
  • 15m @ 108 ppm Cu from 55m to end of hole in MMAC022 (including 7m @ 18.2 ppm Mo, 1.64 g/t Ag to end of hole);
  • 4m @ 125 ppm Cu, 23.0 ppm Mo, 1.14 g/t Ag from 130m to end of hole in MMAC024;
  • 25m @ 141 ppm Cu from 125m to end of hole in MMAC027.
• Target 16:
  • 35m @ 125 ppm Cu from 55m in MMAC070;
  • 18m @ 151 ppm Cu from 30m to end of hole in MMAC074;
  • 20m @ 132 ppm Cu from surface and 10m @ 209 ppm Cu from 80m to end of hole in MMAC075.

DIRECTORS' REPORT

Significant gold (Au) assays were received for MMRB039 and MMRB040 drilled within Target 25. These holes intersected weathered ultramafic basalt and gabbro. The best composite intersection was 5m @ 2.23 g/t Au from surface in MMRB039. The best single metre assay was 1m @ 2.57 g/t Au from 24m in MMRB040. The composite sample that included the same metre sample assayed only 0.11 g/t Au. There may be more significant single metre intervals that have not been assayed to date.

Drill holes from Target 24 (MMRB022-024, MMAC043-067) did not return any significant intersections.

Nickel Targets

Six aircore holes (MMAC080 – 085) were drilled for 331 metres within Targets 17-19. The objective for these holes was to better define the stratigraphic boundaries between the ultramafic Komatiitic basalts and mafic tholeiitic basalts. This contact has previously been partly mapped in the field at surface and by analysing bottom of hole drill chips using multi-element geochemistry. Outcropping rocks are rare within this project and so downhole geochemistry is relied upon heavily along with interpretation of aeromagnetic data when determining the underlying geology. These holes were not planned to intersect Ni mineralisation and there were no significant Ni results.

The komatiite/tholeiite contact is important in the search for Kambalda style Ni sulphide deposits which typically lie at the base of the Komatiitic lava flow in contact with a footwall tholeiitic basalt. Sulphidic and carbonaceous sedments typically flank this zone and provide a source of sulphur (S) for the NiS mineralisation.

Within the Baumgarten Greenstone Belt (BGB) sequence Riedel has identified a widespread, thick komatiite unit. It includes serpentinised dunitic rocks with distinctive orthocumulate, mesocumulate and adcumulate textures. This unit has been subjected to some drilling in the past which resulted in significant intersections including 4m @ 1.07% Ni from 28m and 20m@ 0.52% Ni from 24m. There has been no follow up drilling of these targets, which occur in highly weathered areas of complex geology and poor outcrop.

The study of the geochemistry of the regolith and primary rocks suggest that they are also highly prospective for Ni mineralisation outside of the areas with the historic significant drill intersections listed. These rocks have high Ni and copper in places and are depleted in chrome (Cr) and zinc (Zn) contents. Analysis of the Ni:Cr/Cu:Zn elemental ratios show numerous results of around unity or greater than 1 which correspond to "fertile komatiites" which host economic Ni mineralisation at locations such as Kambalda.

An aerial electromagnetic (EM) survey is planned to cover the entire BGB in search of conductive Ni sulphide deposits as well as conductive Cu sulphide deposits.

WEST AFRICA

BURKINA FASO PROJECTS

Gonsin Project

During the period, all of the assay results from a previously completed 833 hole auger drilling programme were received. The interpretation of these results has generated numerous gold anomalies in a northeast-southwest trending zone over a length of more than seven kilometres within the volcanosedimentary sequence in the north-eastern part of the project area. Some of the anomalies are characterised by highly significant results for gold, including 546 ppb Au, 541 ppb Au and 274 ppb Au. These results compliment previously announced significant auger drilling results, including 498 ppb Au and 335 ppb Au.

Further anomalies, with a peak gold value of 1,939 ppb Au, have also been delineated outside of this corridor to the east and west.

DIRECTORS' REPORT

Tagou Project

During the period all of the assay results from 4,705 soil geochemical samples previously collected were received.

The interpretation of this data generated numerous strong gold-in-soil anomalies and in many instances, the anomalies are coincident with significant interpreted underlying structures. In the central portion of the Permit a broad 15 kilometre x 7 kilometre zone is characterised by elevated gold-in-soil geochemistry, representing a key focus for follow-up gold exploration including geophysical surveys and drilling.

The most significant results include 2,950ppb Au, 450ppb Au, 416ppb Au, 229ppb Au, 180ppb Au, 175ppb Au, 162ppb Au and 116ppb Au.

All assay results have now been received from the June RC drilling programme, and 8 of 10 holes that targeted veins on the southern zone intersected gold mineralisation within granite or dolerite hosted quartz vein or veins.

Best results include 4m @ 2.60 g/t Au from 49m in TGRC011 (including 1m @ 9.79 g/t Au), 11m @ 0.84 g/t Au from 28m in TGRC010 (including 2m @ 2.00 g/t Au) and 2m @ 2.44 g/t Au from 90m in TGRC009.

Keri Project

During the period all of the assay results from a soil geochemical sampling programme, previously completed at the Keri Project, were received.

Numerous significant gold-in-soil geochemical anomalies were discovered, including a 1.8 kilometre long anomaly peaking at 159 ppb Au, which is coincident with a gabbro–felsic volcanic contact in the north-western portion of the sample area. The anomaly is also coincident with an interpreted demagnetised zone that appears to be related to a significant jog in a regional structure.

Moaga Project

During the period all of the assay results from a soil geochemical sampling programme previously completed were received. Numerous anomalous results, including 74 ppb Au and 41ppb Au, were returned from the central part of the sampled area. The sampling programme will be expanded into other parts of the Permit following the wet season.

CORPORATE

On August 13 2012, the Directors of Riedel Resources Limited advised that they had completed a Share Placement to sophisticated and professional investor clients of DJ Carmichael Pty Limited in Australia and the United Kingdom.

The placement raised $1.22 million before costs, with the issue of 16,263,316 ordinary shares at an average issue price of $0.075 per share as follows;

• ─ Tranche 2 Placement of 8,131,658 shares at an issue price of $0.115 per share to raise $0.94 million before costs
• ─ Further placement of 8,131,658 shares at an issue price of $0.035 per share to raise $0.28 million before costs

Tranche 2 of the Placement, being 8,131,658 shares was issued in accordance with pre approval by shareholders received at a General Meeting held on 15 June 2012.

DIRECTORS' REPORT

The further placement, being 8,131,658 shares was issued under the 15% capacity under ASX Listing Rule 7.1. It was subsequently put to shareholders and ratified at a General Meeting held on 27 September 2012. All resolutions put to the meeting were passed unanimously on a show of hands.

On 12 November, 2012, the Company held its Annual General Meeting of Shareholders at The Celtic Club, West Perth. All resolutions put to the meeting were passed unanimously on a show of hands.

On 23 November 2012 the Company advised it had completed a Share Placement offered to sophisticated and professional investor clients of Oracle Securities in Australia and the UK.

The placement will raise up to $0.7 million before costs, with the issue of 9.33 million ordinary shares at an issue price of $0.075 per share and free attaching unlisted option on a 1:1 basis exercisable at 15¢ per share on or before 31 January 2016 ("Options") as follows;

• ─ Up to 9.33 million new shares at 7.5¢ per share to raise circa $0.70 million to be issued within the Company's 10% placement capacity under Listing Rule 7.1A.
• ─ Up to 9.33 million Options to be issued within the Company's 15% placement capacity under Listing Rule 7.1.

The free attaching unlisted options to be issued on a 1:1 basis, being up to 9.33 million options, are to be issued under ASX Listing Rule 7.1, and will subsequently be put to shareholders for ratification at a General Meeting to be held in January 2013.

The placement will settle in two parts with Part 1 representing approximately $0.533 million announced on 7 December 2012. The balance being Part 2 of the placement of approximately $0.167 million, remains outstanding at 31 December 2012.

On 4 December 2012, The Company advised that the total number of listed options (RIEO) which were not exercised by 5.00pm WST on 30 November 2012, and have expired were 29,094,050 options.

On 11 December 2012, the Company granted 1,250,000 unlisted options to Collabrium Capital (Guernsey) Limited as incentives for nil consideration, forming part of an engagement letter to provide non-exclusive corporate advisory services in connection with future capital raising, broking arrangements in the United Kingdom and abroad, and potential merger and acquisition targets. The option terms being exercisable at $0.15 on or before 31 January 2018.

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 is a full time employee of Riedel Resources Limited. 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.

EVENTS SUBSEQUENT TO REPORTING DATE

On 23 November 2012 the Company advised it had completed a Share Placement offered to sophisticated and professional investor clients of Oracle Securities in Australia and the UK. The balance being Part 2 of the placement of approximately $0.167 million, was completed on 7 January 2013.

On 7 January, 2013, the Company issued 2,222,222 shares at a price of 7.5 cents each raising $166,666. The Company also issued 2,222,222 options exercisable at 15 cents expiring 31 January 2016.

DIRECTORS' REPORT

On 25 January, 2013, the Company issued a Notice of General Meeting of Shareholders to be held on 28 February, 2013 at which shareholders must consider resolutions to approve the issue and ratification of 9.33 million shares and options granted to sophisticated and professional investor clients of Oracle Securities as part of the Share Placement announced on 23 November 2012. The General Meeting was subsequently held on 28 February 2013, all resolutions put to the meeting were passed unanimously on a show of hands.

Mr Bruce Franzen resigned as Director of the Company on 31 January 2013.

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 8 for the half year ended 31 December 2012.

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

Jeffrey Moore Managing Director

Date: 14 March 2013

AUDITOR'S INDEPENDENCE DECLARATION

TO THE DIRECTORS OF RIEDEL RESOURCES LTD

In relation to our review of the half-year financial report of Riedel Resources Ltd for the period ended 31 December 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

PKF MACK & CO

SIMON FERMANIS PARTNER

14 MARCH 2013 WEST PERTH, WESTERN AUSTRALIA

8

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2012

		31 December2012	31 December2011
	Note	$	$
Interest revenue	4(a)	13,552	104,143
Other income	4(a)	-	147,954
Administration expenses		(391,885)	(274,190)
Depreciation and amortisation expense		(21,424)	(8,897)
Employee benefits expense		(344,127)	(469,022)
Exploration expenditure incurred		(8,828)	(223,847)
Write-off of exploration expenditure		-	(263,725)
Other expense		(478)	(16)
Loss before income tax	4(b)	(753,190)	(987,600)
Income tax expense		-	-
Loss for the period	4(b)	(753,190)	(987,600)
Other comprehensive incomeItems that maybe reclassified subsequently to profit andloss
Exchange difference on translation of foreign operation		82,401	-
Other comprehensive income (net of tax)		82,401	-
Total comprehensive loss for the period	4(b)	(670,789)	(987,600)
Basic loss per share (cents per share)		(0.80)	(0.02)
Diluted loss per share (cents per share)		(0.80)	(0.02)

The accompanying condensed notes form part of these financial statements.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012

	Note	31 December2012$	30 June2012$
CURRENT ASSETS
Cash and cash equivalents	5	695,549	897,520
Trade and other receivables	6	70,394	96,064
TOTAL CURRENT ASSETS		765,943	993,584
Exploration and development expenditure	7	10,902,527	10,020,122
Property, plant and equipment		153,386	174,810
Financial assets		85,000	85,000
TOTAL NON-CURRENT ASSETS		11,140,913	10,279,932
TOTAL ASSETS		11,906,856	11,273,516
CURRENT LIABILITIES
Trade and other payables		155,581	598,094
Provisions		54,821	47,284
TOTAL CURRENT LIABILITIES		210,402	645,378
TOTAL LIABILITIES		210,402	645,378
NET ASSETS		11,696,454	10,628,138
EQUITYIssued capital	8	14,815,562	13,193,436
Option reserve		290,941	290,941
Foreign currency translation reserve		(121,858)	(204,259)
Share based payments reserve		281,528	164,549
Accumulated losses		(3,569,719)	(2,816,529)
TOTAL EQUITY		11,696,454	10,628,138

The accompanying condensed notes form part of these financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2012

	IssuedCapital	OptionReserve	FOREXReserve	Share BasedPaymentsReserve	AccumulatedLosses	Total
	$	$	$	$	$	$
Balance at 1 July 2012	13,193,436	290,941	(204,259)	164,549	(2,816,529)	10,628,138
Loss for the period	-	-	-	-	(753,190)	(753,190)
Other comprehensive income	-	-	82,401	-	-	82,401
Total comprehensive loss for the period	-	-	82,401	-	(753,190)	(670,789)
Transactions with owners, recordeddirectly in equity
Issue of share capital	1,753,082	-	-	-	-	1,753,082
Issue of options	-	-	-	116,979	-	116,979
Less: share issue costs	(130,956)	-	-	-	-	(130,956)
Balance at 31 December 2012	14,815,562	290,941	(121,858)	281,528	(3,569,719)	11,696,454
Balance at 1 July 2011	10,450,602	290,941	-	-	(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, recordeddirectly 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	290,941	-	92,534	(1,880,158)	8,950,683

The accompanying condensed notes form part of these financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2012

		31 December2012	31 December2011
	Note	$	$
Cash Flows from Operating Activities
Payments to suppliers and employees		(598,055)	(651,999)
Interest received		18,800	119,902
Net cash used in operating activities		(579,255)	(532,097)
Cash Flows from Investing Activities
Proceeds from disposal of exploration tenements		-	110,000
Purchase of plant and equipment		-	(194,989)
Payments for exploration and evaluation		(1,244,842)	(801,259)
Net cash used in investing activities		(1,244,842)	(886,248)
Cash Flows from Financing Activities
Proceeds from issue of sharesProceeds from issue of options		1,753,082-	2,000168,211
Payments for share issue costs		(130,956)	(15,835)
Net cash provided by financing activities		1,622,126	154,376
Net decrease in cash and cash equivalents held		(201,971)	(1,263,969)
Cash and cash equivalents at beginning of the
reporting period		897,520	4,317,723
Cash and cash equivalents at end of the reporting
period	5	695,549	3,053,754

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 half year consolidated financial statements of the Company as at and for the six months ended 31 December 2012 comprises 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 half year consolidated financial statements of the Company as at and for the half year ended 31 December 2012 are available upon request.

NOTE 2: BASIS OF PREPARATION

a) Statement of compliance

The half-year consolidated financial report is a general purpose financial report prepared in accordance with 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'. The half-year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

b) Basis of preparation

The half-year consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The accounting policies and methods of computation adopted in the preparation of the half-year consolidated financial statements are consistent with those adopted and disclosed in the Group's 2012 annual financial report for the financial year ended 30 June 2012, 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.

c) Significant accounting judgments and key estimates

The preparation of the half year consolidated 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.

In preparing these half year consolidated 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 2012.

NOTE 2: BASIS OF PREPARATION (CONT)

d) Going concern

The half year consolidated 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 $753,190 for the period ended 31 December 2012 (31 December 2011: $987,600).

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 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 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.

e) Adoption of new and revised Accounting Standards

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. The Group has not early adopted any Accounting Standards or Interpretations.

New and revised Standards and amendments thereof and Interpretations effective for the current halfyear that are relevant to the Group include:

Amendments to AASB 1, 5, 7, 101, 112, 120, 121, 132, 133 and 134 as a consequence of AASB 2011- 9 'Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income'

The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Group's accounting policies and has no effect on the amounts reported for the current or prior half years. However, the application of AASB 2011-9 has resulted in changes to the Group's presentation of, or disclosure in, its half-year financial statements.

AASB 2011-9 introduces new terminology for the statement of comprehensive income and income statement. Under the amendments to AASB 101, the statement of comprehensive income is renamed as a statement of profit or loss and other comprehensive income and the income statement is renamed as a statement of profit or loss. The amendments to AASB 101 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to AASB 101 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section:

• (a) items that will not be reclassified subsequently to profit or loss; and
• (b) items that may be reclassified subsequently to profit or loss when specific conditions are met.

NOTE 2: BASIS OF PREPARATION (CONT)

e) Adoption of new and revised Accounting Standards (cont)

Income tax on items of other comprehensive income is required to be allocated on the same basis – the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has been modified to reflect the changes. Other than the above mentioned presentation changes, the application of the amendments to AASB 101 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income.

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 half year consolidated 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 and Burkina Faso. 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.

31 December 2012	Australia$	Burkina Faso$	Unallocated$	Total$
Revenue from external sources	-	-	13,552	13,552
Net (profit)/loss before tax	(96)	22,012	731,274	753,190
Reportable segment assets	2,354,311	3,666,794	5,885,751	11,906,856
Reportable segment liabilities	38,680	1,354	170,368	210,402
31 December 2011	Australia$	Burkina Faso$	Unallocated$	Total$
Revenue from external sources	104,143	-	-	104,143
Net (profit)/loss before tax	987,600	-	-	987,600
30 June 2012
Reportable segment assets	6,825,113	3,334,753	1,113,650	11,723,516

Reportable segment liabilities 94,756 319,910 230,712 645,378

NOTE 4: LOSS FROM ORDINARY ACTIVITIES	31 December2012$	31 December2011$
(a) Other revenue
Interest revenue	13,552	104,143
Other income	-	147,954
	13,552	252,097
(b)Expenses
Administration expenses	391,885	274,189
Depreciation and amortisation expense	21,424	8,897
Employee benefits expense	344,127	469,022
Exploration expenditure incurred	8,828	223,847
Write-off of exploration expenditure	-	263,725
Other expense	478	16
	766,742	1,239,696
	31 December2012	30 June 2012$
NOTE 5: CASH AND CASH EQUIVALENTS	$
Cash on hand	5,272	12,332
Cash at bank	690,277	885,188
	695,549	897,520
NOTE 6: TRADE AND OTHER RECEIVABLES
Accrued interest	-	5,248
Prepayments	21,995	17,061
GST refundable	48,399	73,755
	70,394	96,064
NOTE 7: EXPLORATION AND DEVELOPMENTEXPENDITUREExploration and development expenditure reconciliation
Opening balance	10,020,122	5,680,285
Tenement and application fees – at cost	-	2,705,900
Exploration and development expenditure incurred	882,405	1,959,625
Disposal of tenements	-	(62,046)
Expenditure written off	-	(263,642)
Closing balance	10,902,527	10,020,122

The value of the exploration expenditures is dependent upon:

• The continuance of rights to tenure of the area of interest;
• The results of future exploration; and
• The recoupment of costs through successful development and exploitation of the areas of interest or alternatively by their sale

NOTE 8: ISSUED CAPITAL	31 December2012$	30 June2012$
(a) Share Capital
Issued and paid up capital – consisting of ordinary shares	15,549,782	13,796,700
Less: Costs of issue	(734,220)	(603,264)
	14,815,562	13,193,436
(b) Movements in ordinary share capital	Number ofshares	$
Opening balance at 1 July 2012	79,913,464	13,193,436
Issue of shares on 10/08/2012	16,263,316	1,219,749
Issue of shares on 12/11/2012	7,111,107	533,333
Less: capital issue costs	-	(130,956)
Closing balance at 31 December 2012	103,287,887	14,815,562
Opening balance at 1 July 2011	58,208,100	10,450,602
Issue of shares on 26/07/2011	86,660	10,399
Options exercised – issue of shares 11/07/2011	10,000	2,100
Issued of shares on 10/04/2012	12,500,000	1,750,000
Issue of shares on 7/05/2012	7,973,914	917,000
Issue of shares on 9/05/2012	634,790	73,001
Issue of shares on 14/05/2012	500,000	52,500
Less: capital issue costs	-	(62,166)
Closing balance at 30 June 2012	79,913,464	13,193,436

NOTE 9: SHARE BASED PAYMENTS

On 14 July 2011, 8,000,000 performance rights were issued 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:

	Performance
	Rights
Underlying security spot price	$0.135
Exercise price	$0.27-$0.45
Volatility	75%
Risk free rate	5.05%
Grant date	26/07/2011
Expiration date	25/07/2014
Expiration period (years)	3 yrs
Number of options	8,000,000
Valuation per option/performance rights	$0.031-$0.047
Total performance rights valuation	$309,333

The total value of the performance rights of $309,333 are expensed proportionately until 25 July 2014, being the vesting date. The total amount being expensed for the period ended 31 December 2012 is $51,979.30 (31 December 2011: $44,634).

On 11 December 2012, the Company issued 1,250,000 exercisable at 15 cents expiring 31 January 2018 to a Corporate Advisor as part of the remuneration package. The total amount being expensed for the period ended 31 December 2012 is $65,000 for these options.

The terms and conditions relating to these options including the parameters used to value them are as follows:

	Options
Underlying security spot price	$0.08
Exercise price	$0.15
Volatility	95%
Risk free rate	2.73%
Grant date	11/12/2012
Expiration date	31/01/2018
Expiration period (years)	5.14 yrs
Number of options	1,250,000
Valuation per option	$0.052
Total option valuation	$65,000

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

NOTE 10: 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 2012 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 11: EVENTS SUBSEQUENT TO REPORTING DATE

On 23 November 2012 the Company advised it had completed a Share Placement offered to sophisticated and professional investor clients of Oracle Securities in Australia and the UK. The balance being Part 2 of the placement of approximately $0.167 million, was completed on 7 January 2013.

On 7 January, 2013, the Company issued 2,222,222 shares at a price of 7.5 cents each raising $166,666. The Company also issued 2,222,222 options exercisable at 15 cents expiring 31 January 2016.

On 25 January, 2013, the Company issued a Notice of General Meeting of Shareholders to be held on 28 February, 2013 at which shareholders must consider resolutions to approve the issue and ratification of 9.33 million shares and options granted to sophisticated and professional investor clients of Oracle Securities as part of the Share Placement announced on 23 November 2012. The General Meeting was subsequently held on 28 February 2013, all resolutions put to the meeting were passed unanimously on a show of hands..

Mr Bruce Franzen resigned as Director of the Company on 31 January 2013.

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 12: CONTINGENT ASSETS AND LIABILITIES

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

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:
  • (a) complying with Accounting Standards AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and
  • (b) giving a true and fair view of the consolidated entity's financial position as at 31 December 2012 and of its performance for the half year ended on that date.
• 1. 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.

Jeffrey Moore Managing Director

Date: 14 March 2013

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) and controlled entities (consolidated entity) which comprises the condensed consolidated statement of financial position as at 31 December 2012, the condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the half-year ended on that date, condensed 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 2012, 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 halfyear 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 2012 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 and controlled entities, 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. In accordance with the Corporations Act 2001, we have given the directors' of the company a written Auditor's Independence Declaration.

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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 Riedel Resources Limited and controlled entities 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 2012 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 qualifying our conclusion, we draw attention to Note 2 in the financial report which states that the consolidated entity incurred a net loss of $(753,190) during the half year ended 31 December 2012 (31 December 2011: $(987,600)) and had negative operating and investing cash flows of $1,824,097 (31 December 2011: $(1,418,345)). These conditions, along with other matters as set forth in Note 2, 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.

PKF MACK & CO

SIMON FERMANIS PARTNER

14 MARCH 2013 WEST PERTH, WESTERN AUSTRALIA