SABRE RESOURCES LIMITED — Interim / Quarterly Report 2012

Mar 14, 2012

SABRE RESOURCES LTD AND CONTROLLED ENTITIES

(ACN 008 982 474*)*

Interim Financial Report for the Six Month Period Ended 31 December 2011

CONTENTS

Directors' Report	2
Auditor's Independence Declaration	10
Consolidated Statement of Comprehensive Income	11
Consolidated Statement of Financial Position	12
Consolidated Statement of Changes in Equity	13
Consolidated Cash Flow Statement	14
Notes to the Financial Statements	15
Directors' Declaration	18
Independent Auditor's Review Report To The Members	19

DIRECTORS' REPORT

Your Directors present their report on consolidated group of Metals Australia Limited and controlled entities (the "Group") for the half year ended 31 December 2011.

1. DIRECTORS

The names of Directors in office during the whole of the half year and up to the date of this report:

Alex Clemen Jonathan Downes Michael Scivolo David Zukerman

2. REVIEW OF OPERATIONS

Financial Result

The Group incurred a loss after income tax of $415,637 for the half year period (2010: Loss of $308,228). As at 31December 2011 the Group had cash funds of $1,906,477 (30 June 2011 $1,920,788).

3. EXPLORATION ACTIVITIES

Ongava Poly-Metallic Project, Namibia

Sabre's focus is the exploration and development of the Ongava Polymetallic Project. The project is located in the world-class metallogenic province of the Otavi Mountain Land in northern Namibia, historically a globally important source of copper, lead, zinc and vanadium. The province is presently undergoing a renaissance with the work of Sabre and others in the region.

Our Ongava Polymetallic Project contains more than 30 known copper, lead, zinc and vanadium occurrences, including the Kaskara copper-lead-zinc-vanadium discovery, unmined deposits such as the Border and Driehoek lead-zinc deposits, and historic mine sites such as Harasib Claims and Uitsab. Gallium, germanium, silver and gold, are also highly prospective.

The Zn-Pb-Ag deposits of Sabre's Pavian Trend form a series of similar deposits along 20 km of strike. Border is the first of the Pavian Trend deposits to have a JORC resource calculated by Sabre. The Company is aiming for a series of high-tonnage, moderate-grade Zn-Pb-Ag mines, from the Pavian Trend and from further afield, feeding a centrally located processing plant (Figure 1).

Concurrently, the copper potential will be realised through further exploration of Kaskara, Hoba Ost, and the surrounding areas. Kaskara represents an outstanding opportunity for Sabre, showing all of the hallmarks of a major Tsumeb-style deposit.

Figure 1 - Sabre's concept of a centrally-located plant using feed from an array of mines throughout the project area.

a) Kaskara copper-vanadium-lead-zinc

The target at Kaskara (Figure 1) is a copper-lead-zinc sulphide orebody at depth, overlain and supplemented by significant non-sulphide V-Pb-Zn-Cu orebodies at and near surface (Figure 2).

The massive V-Pb-Zn-Cu mineralisation encountered at surface, in drilling, and underground is deeply weathered secondary mineralisation. At other deposits in the region, this style of mineralisation occurs above fresh primary sulphide mineralisation at depth. IP anomalies detected below this secondary mineralisation are regarded as the topmost portion of such sulphide mineralisation at Kaskara.

Sabre discovered previously unknown and inaccessible workings within the underground mine workings at Kaskara during the quarter. Broad zones of massive V-Pb-Zn-Cu mineralisation were encountered in a network of underground tunnels. Some exceptionally high-grade results were returned from channel sampling of these tunnels, including:

1725 Level (30 m beneath surface)

• KKUG0003 13 m @ 2.31% V2O5, 5.59% Pb, 2.38% Zn and 0.32% Cu (6.22% CuEQ1) including 2 m @ 8.49% V2O5, 19.85% Pb, 7.43% Zn and 0.91% Cu (22.13% CuEQ)
• KKUG0013 12 m @ 0.84% V2O5, 2.25% Pb, 1.30% Zn and 0.16% Cu (2.47% CuEQ)

* At this stage, the potential quantity and grade of the Driehoek zinc-lead deposit is conceptual in nature, as Sabre has determined that insufficient work has been undertaken to define a mineral resource and it is uncerta undertaken by Goldfields Namibia Ltd.

$\frac{1}{2}$ CuEQ = copper equivalent. The copper equivalent calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage. These results are exploration results only and no allowance is made for recovery losses that may occur should mining eventually result nor metallurgical flowsheet considerations. The copper equivalent calculation is intended as an indicative value only. Copper Equivalent Formula= Cu% + (Pb% x 0.253) + (Zn% x 0.241) + (V2O5% x 1.695). Price Assumptions- Cu (US$8,192/t), Pb (US$2,065/t), Zn (US$1,979/t), V2O5 (US$13,888/t).

2 m @ 1.95% V2O5, 5.19% Pb, 4.21% Zn and 0.34% Cu (5.98% CuEQ) includina 1 m @ 3.52% V2O5, 8.16% Pb, 2.44% Zn and 0.47% Cu (9.08% CuEQ) $and$

1710 Level (45 m beneath surface)

KKUG0019 22 m @ 1.81% $V_2O_5$ , 4.16% Pb, 1.77% Zn and 0.26% Cu (4.80% CuEQ) including 5 m @ 5.44% V2O5, 12.25% Pb, 5.07% Zn and 0.62% Cu (14.16% CuEQ)

The massive mineralisation occurs as a continuous sub-vertical shoot extending from surface (1755mRL) to a depth of 67 m beneath surface. This new sampling shows that the body is thickening with, and is open at depth. It is expected that the shoot will continue downwards for at least another 100 m (probably more) to intersect sulphide mineralisation at depth (Figures 4 & 5).

Figure 2 – Projected cross section of the Kaskara Mine. Note that the main adit and shaft are projected from up to 70 m off section, and the main mineralised zone is not intersected in the adit.

This particular mineralised shoot is only a small part of the mineralised system at Kaskara. Many massive polymetallic gossans and vein networks have been mapped at surface, and each of these are expected to correspond to a similar shoot of mineralisation.

Kaskara shows a number of features characteristic of the major deposits of the region, such as Tsumeb, including the following:

• Outcropping. locally high-grade mineralisation: $\bullet$
• Outcropping disseminated sulphide mineralisation; $\bullet$
• A broad, strong soil geochemical anomaly; $\bullet$
• Location on a deviation in a major fault system;
• Geophysical anomalies at depth (Figure 2); $\bullet$
• Deep penetrative weathering in a region of otherwise shallow weathering; and $\bullet$
• Secondary copper-lead-zinc vanadate minerals indicative of primary copper-lead-zinc sulphide mineralisation at depth.

Kaskara represents an outstanding opportunity for Sabre, showing all of the hallmarks of a major deposit.

b) Border zinc-lead-silver deposit

The Border Zn-Pb-Ag Deposit (Figure 3) is one of a series of similar deposits scattered along Sabre's 20 km long Pavian Trend in northern Namibia (Figure 1). It is the first of what is expected to be a series of the Pavian Trend deposits to have a JORC resource calculated by Sabre, which was released during the quarter. The Company sees Border as a key part of a future series of hightonnage, moderate-grade Zn-Pb-Ag mines feeding a centrally located processing plant.

Sabre Resources' maiden inferred mineral resource estimate for the Border Deposit is:

16.2 Mt @ 2.12 % Pb+Zn (1.53 % Zn and 0.59 % Pb) and 4.76 g/t Ag,

when reported at a 1.25% Pb+Zn cut-off grade. The mineral resource estimate increases to 31.4 Mt @ 1.50 % Pb+Zn (1.10 % Zn and 0.40 % Pb) and 3.37 g/t Ag when reported at 0.5 % Pb+Zn cut-off grade.

	Resources			Metal Grade			Contained Metal
Category	Cut off( %)	Tonnage(Mt)	Zinc(%)	Lead(%)	Silver(g/t)	Zinc(t)	Lead(t)	Silver(Moz)
Inferred	0.5	31.4	1.10	0.40	3.37	346,000	127,000	3.4
Inferred	1.25	16.2	1.53	0.59	4.76	248,000	95,000	2.5

Table 1 – Border 2011 Mineral Resource Estimate

The inferred mineral resource estimate is based on a nominal 0.5% Pb+Zn wireframe cut-off with a maximum internal dilution of five metres. Grade was interpolated using an inverse distance weighting squared (IDW2 ) technique.

Border is a modified Mississippi Valley-Type (MVT) deposit that consists of galena (lead) and sphalerite (zinc) mineralisation within dolomitic host rocks. No pyrite or any other sulphides are present, and weathering is almost non-existent. The deposit dips at 60° to the north, stretches along strike for 2,430 m, extends for up to 390 m beneath surface (with the bulk of the tonnage and grade within 150 m of surface), and varies between 10 m and 85 m thick (25 m average thickness).

Exceedingly good results from metallurgical and beneficiation test work, and positive results from an initial, high-level scoping study meant that the Company could pursue a higher tonnage, lower grade resource than was initially envisaged than would otherwise have been possible.

The beneficiation tests show exceptional upgrading of the ore, producing in excess of 80 times the original lead content, and around 37 times the original zinc content when DMS is followed by grinding and flotation. Final concentrate grades are around 65 % lead and 61.5 % zinc (from an ore grading 0.77 % Pb and 1.66 % Zn), with final recoveries of 86.9 % and 81.7 % respectively.

In summary, after DMS and flotation 81.7 % of the total zinc and 87.8 % of the total lead and 89 % of the total silver can be expected to be recovered. Most importantly for the economics of the project, only 17 % of the mined ore would require milling and flotation at a relatively coarse grind size of 150 microns.

Figure 3 - Oblique view of the resource block model for the Border Zn-Pb-Ag deposit

Several open pit scenarios are being considered for mining at Border, ranging between 500,000 tonnes per annum (tpa) and 2 million tpa. For a 1 million tpa mine, key findings from the Border high level scoping study are as follows:

• The value of the potential ore is around $$US45/t^2$
• The average direct mining costs are estimated at around $US10/t potential ore3
• Mineral processing costs are estimated at around $US6/t potential ore
• All metal royalties amount to 3%

Note that these figures are preliminary in nature and may vary by $\pm$ 30%, as is the nature of such highlevel scoping studies.

Comparison to the Pering Mine in South Africa (20.4 Mt @ 0.58 % Pb and 2.58 % Zn) shows that moderate-grade, high-tonnage Mississippi Valley-Type deposits can be economically viable, profitable assets in southern Africa. Sabre believes that Border, with additional tonnages from Driehoek and other deposits to be defined along the Pavian Trend, will be a significant lead and zinc producer in the Otavi Mountain Land.

c) Driehoek zinc-lead-silver deposit

Driehoek is a zinc-lead deposit outcropping on a series of prominent hills around 2.5 km south of Kaskara. Broad zones of moderate grade mineralisation enclose numerous higher grade zones.

Driehoek is comprised of four discrete bodies: Driehoek North, Driehoek Central, Driehoek East and Driehoek South. The first three of these will comprise the initial resource at Driehoek, for which the exploration target is:

3 to 6Mt @ 4-7% Pb+Zn4

This estimate is based on a mineral resource estimate completed by Goldfields Namibia Ltd in 1997. Sabre's is aiming to validate historic drill and trenching results in order to calculate a new resource at Driehoek.

<sup>2 Prices used for calculation are at a 5% discount to metals prices listed on the London Metals Exchange on 18/1/2012. The actual values used in the calculation are Zn: US$1870/t, Pb: US$1960/t, Ag: US$28/oz.

3 Mining cost of ore is calculated from the general mining cost per tonne (~$3.80 per tonne) and the strip ratio (here a nominal 1.65:1 based on the geometry of the deposit).

At this stage, the potential quantity and grade of the Driehoek zinc-lead deposit is conceptual in nature, as Sabre has determined that insufficient work has been undertaken to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource. The "exploration target" size was based upon deposit calculations undertaken by Goldfields Namibia Ltd.

Drilling at Driehoek East validated historic drilling and exceeded grade expectations. Three diamond drillholes have returned excellent results, including:

DKDD0008 61.85m @ 4.21% Pb+Zn (2.96% Zn + 1.25% Pb) & 6.30g/t Ag from 12.4m including 2 m @ 12.09% Pb+Zn (10.07% Zn + 2.03% Pb) & 11.87g/t Ag from 18.9m and 3 m @ 13.78% Pb+Zn (7.90% Zn + 5.88% Pb) & 27g/t Ag from 54m

DKDD0009 71m @ 3.62% Pb+Zn (2.63% Zn + 1.00% Pb) and 4.75g/t Ag from 10m including 4 m @ 11.43% Pb+Zn (7.26% Zn + 4.17% Pb) & 22.75g/t Ag from 18m and 9 m @ 7.61% Pb+Zn (5.71% Zn + 1.90% Pb) & 9.52g/t Ag from 28m

DKDD0010 55.75m @ 2.04% Pb+Zn (1.67% Zn + 0.36% Pb) & 1.32g/t Ag from 16.25m including 20.75m @ 3.03% Pb+Zn (2.18% Zn + 0.84% Pb) & 3.7g/t Ag from 16.25m and 5m @ 3.52% Zn from 67m

The deposit is open in several directions that will be investigated at a later date. The results of this drilling will be used to contribute towards the Driehoek resource.

Drilling at Driehoek North and Central were curtailed by difficult terrain and the onset of the wet season. A man-portable rig which can be manoeuvred to the required locations is being sourced to recommence drilling with the cessation of the current rainy season. Channel sampling over Driehoek North earlier confirmed historic sampling and matched the excellent results at Driehoek Central, with results including:

	DKCS0010 100 m @ 3.21 % Pb+Zn (2.34 % Zn + 0.87% Pb)including2 m @ 14.59 % Pb+Zn (10.52 % Zn + 4.08 % Pb)and4 m @ 32.53 % Pb+Zn (21.95 % Zn + 10.58 % Pb)38 m @ 1.84 % Pb+Zn (1.42 % Zn + 0.42 % Pb)
	DKCS0009 45 m @ 3.34 % Pb+Zn (2.26 % Zn + 1.07 % Pb)including 2 m @ 12.06 % Pb+Zn (9.25 % Zn + 2.81% Pb)
	DKCS0008 65 m @ 5.46 % Pb+Zn (4.06 % Zn + 1.40% Pb)including19 m @ 8.97 % Pb+Zn (6.56 % Zn + 2.41 % Pb)38 m @ 2.90 % Pb+Zn (2.19 % Zn + 0.72 % Pb)
	DKCS0007 201 m @ 2.71 % Pb+Zn (2.00 % Zn + 0.71% Pb)including5 m @ 17.95 % Pb+Zn (13.25 % Zn + 4.70 % Pb)and12 m @ 9.17 % Pb+Zn (5.49 % Zn + 3.69 % Pb)
	DKCS0006 68 m @ 3.76 % Pb+Zn (3.31 % Zn + 0.45% Pb)including6 m @ 17.89 % Pb+Zn (16.41 % Zn + 1.48 % Pb)12 m @ 11.51 % Pb+Zn (8.54 % Zn + 2.97 % Pb) (new discovery)
	DKCS0005 65 m @ 1.95 % Pb+Zn (1.52 % Zn + 0.43% Pb)

d) South Ridge zinc-lead-silver prospect

Sabre has discovered a broad zone of outcropping lead and zinc mineralisation, measuring around 1,500 x 50 m, during mapping of a geochemical anomaly at the South Ridge prospect (Figure 1). The mineralisation is vein network- and shear-hosted and similar in style and geometry to the Border deposit located 5.7 km to the west. The only important difference between the two deposits is the presence of significantly higher grades at surface at South Ridge.

The fresh galena and sphalerite mineralisation at South Ridge has been mapped continuously for over 1.5 km of strike length (Figure 4). It is over 50 m thick at the highest grade and thickest part and outcrops at the base of and on the northern slopes of a prominent hill.

A channel sampling programme is underway at South Ridge. It is designed to locate the strongest part of the mineralisation for the purposes of drill testing. The first three channels have returned very encouraging results:

e) Hoba Ost area (copper, lead, zinc, silver)

Work is ongoing at Hoba Ost. Numerous areas of mineralisation have been identified in regional mapping and sampling. A soil sampling programme is presently underway to systematically cover the mineralised areas and to define targets that may have otherwise been missed.

Highly anomalous copper, lead, zinc, silver and vanadium are evident in outcropping carbonate rocks distributed over an area covering 470 hectares. Grades encountered in grab samples from a first-pass examination of the area include:

• Copper values up to 1.3 %;
• Lead values up to 7.1 %:
• Zinc values up to $12.3%$ ;
• Silver values up to 114 ppm $(-3.7)$ troy oz per tonne); and
• Vanadium values up to 186 ppm.

Mineralisation in the Hoba Ost area was discovered as part of Sabre's ongoing field reconnaissance programme. No historical prospects are gazetted in the area. Sabre's regional magnetic dataset combined with new geological interpretations were instrumental in the identification of this area as being prospective for mineralisation.

f) Other work

Our regional assessment of the prospects of the Ongava Project continues with several sites investigated during the latter half of 2010. Interpretation of the regional magnetic dataset is ongoing.

Sabre continues to assess other copper-lead-zinc prospects in the vicinity of the Ongava Project. Prospects within a nominal 100 km radius of the Ongava Project are being considered for exploration from our existing base. Several copper plays have been investigated in some detail, and negotiations are continuing on potential access to these prospects.

COMPETENT PERSON DECLARATION

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr Matthew Painter of Sabre Resources Ltd, who is a member of The Australian Institute of Geoscientists. Dr Painter has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves". Dr Painter consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

$\overline{\mathbf{A}}$ AUDITOR'S INDEPENDENCE DECLARATION

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 10.

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

David Zukerman Director

Perth. 15 March 2012

Grant Thornton (WA) Partnership ABN 17 735 344 518

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

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

Auditor's Independence Declaration To The Directors of Sabre Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Sabre Resources Limited for the half-year ended 31 December 2011, I declare that, to the best of my knowledge and belief, there have been:

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

GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants

P W Warr Partner

Perth, 15 March 2012

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

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

	ConsolidatedHalf year 2011$	ConsolidatedHalf year 2010$
Other Revenue
Interest earned	39,781	109,398
Cost recovery	68,797	74,842
Change in fair value of investments	-	13,333
	108,578	197,573
Expenditure
Change in fair value of investments	10,667	-
Depreciation	31,436	26,949
Key management personnel remuneration	257,976	206,392
Management fees	121,284	117,701
Occupancy costs	55,200	81,811
Other operating costs	116,959	153,326
	593,522	586,179
(Loss) before income tax	(484,944)	(388,606)
Income tax benefit	69,306	-
(Loss) for the half year	(415,637)	(388,606
Other Comprehensive IncomeExchange differences on translating foreign controlled
entities	(540,040)	80,378
Total comprehensive (loss) for the half year	(965,537)	(308,228)
Basic and diluted profit/(loss) per share	(0.36) cents per share	(0.35) cents per share

The accompanying notes form part of these financial statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

	Consolidated
	31 December 2011$	30 June 2011$
CURRENT ASSETS
Cash and cash equivalents	1,906,477	1,920,788
Trade and other receivables	39,175	79,013
TOTAL CURRENT ASSETS	1,945,652	1,999,801
NON CURRENT ASSETS
Financial assets	37,333	48,000
Plant and equipment	108,519	148,590
Exploration and evaluation expenditure	13,873,342	12,961,146
TOTAL NON-CURRENT ASSETS	14,019,194	13,157,736
TOTAL ASSETS	15,964,846	15,157,537
CURRENT LIABILITIES
Trade and other payables	121,616	193,518
Provisions	2,936	-
TOTAL CURRENT LIABILITIES	124,552	193,518
TOTAL LIABILITIES	124,552	193,518
NET ASSETS	15,840,294	14,964,019
EQUITYIssued capital	36,403,620	34,561,808
Share option reserve	652,716	652,716
Foreign currency translation reserve	(867,886)	(317,986)
Accumulated losses	(20,348,156)	(19,932,519)
TOTAL EQUITY	15,840,294	14,964,019

The accompanying notes form part of these financial statements.

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

	OrdinaryShareCapital	OptionPremiumReserve	ForeignCurrencyTranslationReserve	(AccumulatedLosses)	Total
BALANCE AT 1 JULY 2010	$34,461,808	$652,716	$(81,642)	$(19,100,162)	$15,932,720
Shares issued on exercise of options	100,000				100,000
Loss attributable for the period	-	-	-	(388,606)	(388,606)
Total other comprehensiveincome/(loss) for the period	-	-	80,378	-	80,378
BALANCE AT 31 DECEMBER 2010	34,561,808	652,716	(1,264)	(19,488,768)	15,724,492
	OrdinaryShare	OptionPremium	ForeignCurrencyTranslation	(Accumulated
	Capital	Reserve	Reserve	Losses)	Total
BALANCE AT 1 JULY 2011	$34,561,808	$652,716	$(317,986)	$(19,932,519)	$14,964,019
16,500,000 shares issued during the	1,938,750	-	-	-	1,938,750
periodShare issue costs	(96,938)				(96,938)
Loss attributable for the period	-	-	-	(415,637)	(415,637)
Total other comprehensiveincome/(loss) for the period	-	-	(549,900)	-	(549,901)

The accompanying notes form part of these financial statements.

CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2011

_________________________________________________________________________________________________________________

	Consolidated
	Half year2011$	Half year2010$
Cash Flows from Operating Activities
Payments to suppliers and employees	(592,372)	(626,433)
Interest received	51,607	148,383
Other income	138,103	74,842
Net cash (used in) operating activities	(402,662)	(403,208)
Cash Flows From Investing Activities
Purchase of fixed assets	-	(3,526)
Payment for exploration expenditure	(1,471,122)	(1,309,746)
Purchase of shares	-	(86,667)
Proceeds on disposal of fixed assets	8,635	-
Net cash (used in) investing activities	(1,462,487)	(1,399,939)
Cash Flows from Financing Activities
Proceeds for share issue	1,938,750	-
Share issue costs	(96,938)	-
Proceeds from exercise of options	-	100,000
Net cash provided by financing activities	1,841,812	100,000
Net (decrease) in Cash and Cash Equivalents	(23,337)	(1,703,147)
Cash and Cash Equivalents at the Beginning of the Half Year	1,920,788	5,120,154
Effect of exchange rates on cash holdings in foreign currencies	9,026	(154)
Cash and Cash Equivalents at the End of Half Year	1,906,477	3,416,853

The accompanying notes form part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2011

_________________________________________________________________________________________________________________

1. BASIS OF PREPARATION OF HALF YEAR REPORT

Sabre Resources Ltd is a company domiciled in Australia.

This general purpose financial report for the interim half year reporting period ended 31 December 2011 has been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134 Interim Financial Reporting. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

This interim financial report is intended to provide users with an update on the latest annual financial statements of Sabre Resources Ltd and its controlled entities (the Group). As such, it does not contain information that represents relatively insignificant changes occurring during the half year within the Group. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2011 together with any public announcements made during the half year.

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

Accounting Standards not previously applied

New or revised Standards and Interpretations that are first effective in the current reporting period:

The Group has adopted 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 period.

Change in accounting policy

From 1 July 2011, the Company has adopted the following standards for the reporting periods on or after 1 July 2011.

Amendments to AASB 134 Interim Financial Reporting.

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

Going concern

The Group has reported a net loss for the period of $415,637 and a cash outflow from operating activities of $402,622.

The financial report has 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 ordinary course of business.

The directors plan to raise additional capital and/or enter into funding arrangements to continue the exploration activities of the Group's Exclusive Prospecting Licence areas. Should a capital raising or funding arrangement not occur, the directors will carefully manage discretionary expenditure including exploration expenditure and are confident there are currently sufficient

funds for at least 12 months from signing this report. Namibian exploration tenements do not have a minimum amount which is required to be spent on exploration in each year.

_________________________________________________________________________________________________________________

The directors are confident that the Group will be able to continue its operations as a going concern.

2. DIVIDENDS

No dividends have been paid or proposed during the six month period ended 31 December 2011.

3. EVENTS SUBSEQUENT TO REPORTING DATE

No matters or circumstances have arisen since the end of the half year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company.

4. CAPITAL AND LEASING COMMITMENTS AND CONTINGENCIES

There has been no material change in contingent liabilities and commitments since the end of the last annual reporting period.

5. INVESTMENT

	December 2011	June 2011
	$	$
Investment in listed shares	37,333	48,000

During the previous period, the Company acquired shares in a listed entity and these shares are classified as financial assets at fair value through profit and loss. Changes in fair value are included in the statement of comprehensive income.

6. OPERATING SEGMENTS

Segment Information

Identification of reportable segments

The Group has identified its operating segments based on the internal management reports that are reviewed and used by the executive management team (the chief operating decision makers) in assessing performance and determining the allocation of resources. As the Group is focused on mineral exploration, the Board monitors the Group based on actual exploration expenditure incurred by area of interest. The internal reporting framework is the most relevant to assist the executive management team with making decisions regarding the Group and its ongoing exploration activities, while also taking into consideration the results of exploration work that has been performed to date.

The executive management team has aggregated the performance of all segments as they maintain similar economic characteristics including the development and exploration of the Group's mineral interests in Namibia.

Basis of Accounting for purposes of reporting by operating segments

Accounting Policies Adopted

All amounts reported to the Board of Directors with respect to operating segments are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.

Unallocated items

Corporate costs are not considered core operations of any segment.

7. ISSUED CAPITAL

	Details	Number ofShares	Amount$
1 July 2010	Balance	109,802,997	34,461,808
September/October 2010	Shares issued on exercise ofti	400,000	100,000
31 December 2010	Balance	110,202,997	34,561,808
30 June 2011	Balance	110,202,997	34,561,808
17 November 2011	Shares issuedShare issue costs	16,500,000	1,938,75096,937
31 December 2011	Balance	126,702,997	36,403,620

_________________________________________________________________________________________________________________

The Company's capital consists of Ordinary Shares. The Company do not have a limited amount of authorised share capital. The Shares have no par value and are entitled to participate in dividends and the proceeds on any winding up of the Company in proportion to the number of Shares held.

At shareholders' meetings each fully paid ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

8. SHARE OPTION RESERVE

Date	Details	Number ofOptions	Amount$
1 July 2010	Balance	32,250,000	652,716
September/October 201030 November 2010	ExercisedExpired	(400,000)(500,000)	--
31 December 2010	Balance	31,350,000	652,716
30 June 2011	Balance	31,350,000	652,716
30 November 2011	Expired	(8,350,000)	-
31 December 2011	Balance	23,000,000	652,716

The weighted average remaining contractual life of options outstanding at year end was 1.08 years. The exercise price of outstanding shares at the end of the reporting period was 10 cents*.*

9. RELATED PARTY TRANSACTIONS

During the six months to 31 December 2011, $45,000 (2010: $69,050) was paid to Clemen and Associates a company related to director Mr Clemen as consulting fees for director's fees and geological services provided.

DIRECTORS' DECLARATION

The directors of the Company declare that:

• The financial statements and notes, as set out on the accompanying pages, are in accordance $(a)$ with the Corporations Act 2001 including:
  • complying with Australian Accounting Standard, AASB 134: Interim Financial Reporting; $(i)$ and
  • giving a true and fair view of the consolidated entity's financial position as at 31 December $(ii)$ 2011 and of its performance for the half year ended on that date; and
• $(b)$ In the directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

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

$\leftarrow$

David Zukerman Director

Perth, dated this fifteenth day of March 2012

Grant Thornton (WA) Partnership ABN 17 735 344 518

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

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

Independent Auditor's Review Report To the Members of Sabre Resources Limited

We have reviewed the accompanying half-year financial report of Sabre Resources Limited ("Company"), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors' declaration of the consolidated entity, comprising both the Company and the entities it controlled at the half-year's end or from time to time during the half-year.

Directors' responsibility for the half-year financial report

The directors of the Company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with the Auditing Standard on Review Engagements ASRE 2410: Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the consolidated entity's financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Sabre Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

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

Independence

In conducting our review, we complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Sabre 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
• b complying with Accounting Standard AASB 134: Interim Financial Reporting and Corporations Regulations 2001.

GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants

P W Warr Partner

Perth, 15 March 2012