ZEOTECH LIMITED — Interim / Quarterly Report 2013

Mar 13, 2013

==> picture [133 x 39] intentionally omitted <==

LACONIA RESOURCES LIMITED ABN 29 137 984 297 INTERIM FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2012

==> picture [595 x 67] intentionally omitted <==

This interim financial report does not include all the notes of the type normally included in an annual financial report. This report is to be read in conjunction with the Annual Report for the year ended 30 June 2012 and any public announcements made by Laconia Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001

2

Contents	Page
Corporate Directory	4
Directors’ Report	5
Auditor’s Independence Declaration	15
Statement of Comprehensive Income	16
Statement of Financial Position	17
Statement of Changes In Equity	18
Statement of Cash Flows	19
Notes to the Financial Statements	20
Directors’ Declaration	24
Independent Auditor’s Review Report	25

3

CORPORATE DIRECTORY

ABN 29 137 984 297

Directors

Matthew Howison (Non-Executive Chairman) Ian Stuart (Managing Director) Dr Saliba Sassine (Non-Executive Director) Vincent Algar (Non-Executive Director)

Company Secretary

Matthew Edmondson

Registered Office

Level 1, 41-43 Ord Street West Perth WA 6005 PO Box 1151 West Perth WA 6872

Internet

Email: info@laconia.com.au Web: www.laconia.com.au

Principal Place of Business

Peruvian Office

Level 1, 41-43 Ord Street West Perth WA 6005 PO Box 1151 West Perth WA 6872 Telephone: +61 8 9486 1599 Facsimile: +61 8 9486 7899

Calle Enrique Palacios, 335, Office 507 Miraflores, Lima – 18, PERÚ Telephone: +51 1 370 9015 Facsimile: +51 1 253 6148

Solicitors

Peruvian Solicitor

Steinepreis Paganin Level 4, The Read Buildings, 16 Milligan Street Perth WA 6000 Telephone: +61 8 9 321 4000 Facsimile: +61 8 9321 4333

Rodrigo Elias & Medrano Av. San Felipe, Jesus Maria Lima 11,Peru Telephone: +51 1 619 1900 Facsimile: +51 1 619 1919

Share Register

Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153

Auditors

Peruvian Auditor

Rothsay Chartered Accountants Level 18, Central Park Building 152-158 St Georges Terrace Perth WA 6000 Telephone: +61 8 6364 5076 Facsimile: +61 8 9288 4400

Grant Thornton Peru 8[th] Floor, Towers of San Isidro Av. República de Panamá 3030 Lima 27, Peru Telephone: +51 1 615 6868 Facsimile: +51 1 615 6888

Securities Exchange Listing

Laconia Resources Limited shares are listed on the Australian Securities Exchange (ASX code: LCR).

4

LACONIA RESOURCES LIMITED 31 DECEMBER 2012

DIRECTORS’ REPORT

Your directors are pleased to present their report on Laconia Resources Limited for the half-year ended 31 December 2012.

DIRECTORS

The names of the directors who held office during or since the end of the interim period and until the date of this report are noted below:

Matthew Howison	Non-Executive Director Chairman (Appointed 1 August 2012)
Ian Stuart	Managing Director
Saliba Sassine	Non-Executive Director
Vince Algar	Non-Executive Director (Appointed 2 July 2012)
Michael Sharwood	Chairman (Resigned 1 August 2012)

CORPORATE

Appointment of New Chairman

On 1 August 2012, the Company appointed Matthew Howison as Chairman of the Company. Mr Howison has been a Non-Executive Director of the Company since 29 June 2009. The former Chairman. Michael Sharwood announced that he was stepping down as inaugural Chairman to concentrate on his other business interests.

Mr Howison is a lawyer and investment banker who has held senior positions at NM Rothschild & Sons (Australia) Limited, Turnbulll & Partners, Goldman Sachs Australia and Salomon Smith Barney before establishing the private merchant banking firm Emerald Partners.

Mr Howison has considerable experience in the emerging markets of Russia, China, South America and South Africa particularly in relation to natural resources and energy investments and transactions.

Mr Howison holds bachelor and masters degrees in law from the University of Sydney and completed his MBA degree at the London Business School and on secondment to Columbia University in New York. He served on the Board of the Museum of Contemporary Art from 2002-2005 and is currently a board member of PICA (Perth Institute of Contemporary Art).

5

LACONIA RESOURCES LIMITED 31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

Appointment of Non-Executive Director

On 2 July 2012, Vincent Algar was appointed as a Non-Executive Director. Mr Algar is a geologist by profession with over 20 years experience in the mining industry spanning underground and open cut mining operations, green fields exploration, project development and mining services in Western Australia and Southern Africa. He has significant experience in the management of publicly listed companies, which includes the entire compliance, marketing and management process and encompasses the development of internal geological and administrative systems, exploration planning and execution, plus project acquisition and deal completion. As founding managing director of Shaw River Manganese Limited formerly Shaw River Resources Limited (December 2006 – March 2012) he was responsible for successful capital raisings, which raised more than $40 million for the Company’s exploration and acquisition programs, and was also directly involved in the $20 million acquisition of a 75.5% stake in the Otjo Project in Namibia, in 2011.

REVIEW OF OPERATIONS

A summary of revenues and results for the period is set out below:

		2012
	Revenues		Results
	$		$
Laconia Resources Limited	202,170		(2,294,087)

COMMERCIAL ACTIVITIES

Placement and Rights Issue

In September 2012, the Company announced it had completed a share placement to sophisticated and professional investors which raised $478,875 through the issue of 23,643,751 ordinary shares.

Also in September 2012, the Company announced a fully underwritten rights issue offer to subscribe for 1 share for every 2 shares held at an issue price of $0.02. In October 2012, the Company concluded the rights issue through the issue of 90,634,380 ordinary shares to raise $1,812,688.

6

LACONIA RESOURCES LIMITED 31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

EXPLORATION ACTIVITIES

Rasuhuilca Project, Peru

On-going review of existing exploration data highlighted gold and silver targets in veining and breccia zones at various locations over the Rasuhuilca volcanic system. These high grade targets were identified from systematic review and collation of data acquired with the Rasuhuilca Project, predominantly originating from Buenaventura and Cominco. In several cases original sample data has been verified with duplicate sampling completed by Laconia.

The project has an Inferred Resource estimate of 360,000t at 1.97g/t gold, and 179g/t silver (at a 2.5g/t AuEq cut-off[1] ). The resource statement is based on historical data, which has been verified by check sampling by Laconia.

In November 2012, Laconia agreed to formalise a seven year Option Agreement over 5,622 hectares of additional contiguous exploration licences immediately adjacent to its current 2,765ha Rasuhuilca Project. This provides complete access to the entire surrounding epithermal volcanic system considered highly prospective for gold, silver and copper mineralisation.

Consultation with local community groups continues, leading to Peruvian government permitting, in order to enable drilling approval.

Nick Shakesby was appointed Chief Operating Officer, Peru in January 2013.

1 All cut offs based on an Xg/t Au Eq are conceptual in nature only. There has been insufficient metallurgical test work to date to determine eventual metallurgical recoveries and it is uncertain that the conceptual cut offs used will be appropriate following further metallurgical test work

7

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

==> picture [456 x 560] intentionally omitted <==

Figure 1: Rasuhuilca Project location map.

8

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

Australian Exploration Activities

==> picture [380 x 556] intentionally omitted <==

Figure 2: Western Australian Project locations.

9

LACONIA RESOURCES LIMITED 31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

Lennons Find Project – precious and base metals, East Pilbara, WA (95% Laconia)

Lennons Find Prospect (M45/368)

The Lennons Find Mineral Resource figures, updated January 2012, are 1.80Mt at 82g/t silver, 0.26g/t gold, 5.1% zinc, 0.2% copper and 1.4% lead in Indicated and Inferred Resource categories as tabulated below.

	Deposit	Ore Type	Tonnes (t)	Au	Ag	Cu	Pb	Zn
				(g/t)	(g/t)	(%)	(%)	(%)
	Bronze Whaler	Oxide	30,000	0.29	60	0.3	0.9	0.2
Indicated	Hammerhead Tiger	Oxide Oxide	140,000 20,000	0.41 0.18	95 93	0.2 0.1	1.3 0.9	1.8 0.8
	Total - Indicated	Oxide	200,000	0.37	89	0.2	1.2	1.4
	Bronze Whaler	Sulphide	150,000	0.15	33	0.1	0.7	1.5
Inferred	Hammerhead Tiger	Sulphide Sulphide	1,400,000 50,000	0.27 0.03	87 36	0.2 0.1	1.6 0.3	6.1 2.8
	Total - Inferred	Sulphide	1,600,000	0.25	81	0.2	1.5	5.6
	Bronze Whaler		180,000	0.18	37	0.1	0.7	1.3
Total	Hammerhead Tiger		1,600,000 70,000	0.28 0.08	88 55	0.2 0.1	1.6 0.5	5.7 2.2
	Total - Lennons Find		1,800,000	0.26	82	0.2	1.4	5.1

Table 1: Lennons Find Mineral Resource estimate as at January 2012.

Note 1: For Oxide resources the Bronze Whaler deposit is reported above 1% Zn Eq, the Hammerhead deposit is reported above 2% Zn Eq and the Tiger deposit is reported above 4% Zn Eq.

Note 2: For Sulphide resources the Bronze Whaler deposit is reported above 1% Zn Eq, the Hammerhead deposit is reported above 2% Zn Eq and the Tiger deposit is reported above 4% Zn Eq.

All cut offs based on an X% Zn Eq are conceptual in nature only. There has been insufficient metallurgical test work to date to determine eventual metallurgical recoveries and it is uncertain that the conceptual cut offs used below will be appropriate following further metallurgical test work.

A preliminary economic assessment of the known oxide resource at Lennons Find was conducted. Preliminary metallurgical testwork on composite samples was completed, indicating the following recoveries are possible from direct cyanide leaching:

• Gold extraction 80.4%

• Silver extraction 92.1%

• Copper extraction 41.6%

10

LACONIA RESOURCES LIMITED 31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

These tests were performed on two composites samples collected from RC drill chips. The direct cyanidation results are extremely encouraging, and warrant further exploration work to expand the resource base given the current high prices achievable for gold and silver.

A preliminary economic assessment of the known oxide resource at Lennons Find was conducted. An optimisation run using the Lerchs-Grossman algorithm was undertaken on the oxide resource, looking to recover only gold, silver and copper using the direct cyanide leach results as the basis for the optimisation. Two price scenarios were considered (Table 2) which led to NPV’s of $6.2m and $12.6m[2] for the spot price scenario and the bull price scenarios respectively (Table 3).

Metal	Spot (US$)	Bull Price (US$)
Silver/oz	34	50
Gold/oz	1761	2000
Copper/t	8110	9000

Table 2: Price scenarios used in Lennons Find pit optimisation.

Scenario	Total	Ore	Gold	Silver	Copper	Revenue	Proc	Mining	NPV
	tonnes	tonnes	(koz)	(koz)	(kt)	($M)	Cost	Cost	($M)
	(kt)	(kt)					($M)	($M)
SPOT	1,175	124	1.7	406	0.3	12.9	1.3	5.3	6.2
BULL	1,663	150	1.9	473	0.3	22	1.6	7.4	12.6

Table 3: Results of pit optimisation of Lennons Find oxide resource.

Yandicoogina Prospect (E45/3293)

No work was completed at the Yandicoogina Prospect during the period.

2 Value quoted for NPV is indicative only and does not take into account capital cost estimates.

11

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

701 Mile Project – precious and base metals, Northern Gascoyne, WA (80% Laconia excluding manganese and iron)

The exploration significance of the base metal anomalism in relation to regional context was reviewed in the reporting period. This, in effect, has drawn attention to base metal prospectivity in the Proterozoic region as a whole.

Barramine Project – gold and base metals, East Pilbara, WA (100% Laconia excluding manganese and iron ore)

No work was completed at the Barramine Project during the period.

Mooletar Project – iron ore, Mid West, WA (100% Laconia)

A tenement rationalisation process was completed at the Mooletar Project during the period. This included the reduction in the number of Prospecting Licences, to reduce the overall administrative overhead while maximising exposure to the prospective magnetite horizon. In addition, the Company completed the acquisition of E58/391, adding 5km of strike length to the current known magnetite horizon. The new licence addition has not been explored using modern geochemical techniques for gold mineralisation despite its close proximity to the Mt Magnet goldfield.

Kookynie Project – gold and base metals, Eastern Goldfields, WA

The three Kookynie licences were sold to Rubianna Resources Limited in December 2012.

12

LACONIA RESOURCES LIMITED 31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

Competent Persons Statements

The information in this report that relates to Rasuhuilca and Lennons Find Projects Exploration Results or Exploration Targets is based on information compiled by Mr Vincent Algar, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Algar is a Non-Executive Director and consultant to Laconia Resources Limited and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Algar consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.”

Lennons Find and Rasuhuilca Mineral Resource Estimates

The information in this report that relates to Mineral Resources is based on information compiled by Mr Michael Andrew, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Andrew is a Principal of Optiro Pty Ltd and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Andrew consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

13

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

DIRECTORS’ REPORT (continued)

AUDITOR’S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, Rothsay Chartered Accountant, to provide the directors of the company with an Independence Declaration in relation to the review of the interim financial report. This Independence Declaration is set out on page 15 and forms part of this directors’ report for the half-year ended 31 December 2012.

This report is signed in accordance with a resolution of the Board of Directors made pursuant to s.306 (3) of the Corporations Act 2001.

==> picture [90 x 60] intentionally omitted <==

Ian Stuart Managing Director Perth, 14 March 2013

14

15

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

Note REVENUE 2 EXPENDITURE Administration expenses Depreciation expense Exploration expenses Salaries and employee benefits expense Share-based payments 5 LOSS BEFORE INCOME TAX Income tax benefit / (expense) TOTAL COMPREHENSIVE LOSS FOR THE PERIOD ATTRIBUTABLE TO MEMBERS OF LACONIA RESOURCES LIMITED Basic and diluted loss per share (cents)	2012 $ 2011 $ 202,170 384,078 (1,138,903) (413,275) (40,792) (21,197) (252,546) (768,409) (152,576) (149,253) (1,119,110) - (2,501,757) (968,056) 207,670 - (2,294,087) (968,056) (1.2) (1.2)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

16

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012

CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment Mining properties TOTAL NON-CURRENT ASSSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	31 December 30 June 2012 $ 2012 $ 1,316,537 926,590 219,975 78,012
	1,536,512 1,004,602
	146,101 169,066 6,053,464 5,960,380
	6,199,565 6,129,466
	7,736,077 7,134,048
	173,836 542,140
	173,836 542,140
	173,836 542,140
	7,562,241 6,591,908
	13,754,442 11,975,022 2,357,916 872,916 (8,550,117) (6,256,030)
	7,562,241 6,591,908

The above statement of financial position should be read in conjunction with the accompanying notes.

17

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

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

BALANCE AT 1 JULY 2011 Loss for the period TOTAL COMPREHENSIVE LOSS BALANCE AT 31 DECEMBER 2011 BALANCE AT 1 JULY 2012 Loss for the period TOTAL COMPREHENSIVE LOSS TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Options issued during the period Shares issued during the period BALANCE AT 31 DECEMBER 2012	Contributed Equity Convertible Note Share-based Payments Reserve Options Reserves Accumulated Losses Total $ $ $ $ $ $ 8,895,639 - 223,826 - (3,036,035) 6,083,430 - - - - (968,056) (968,056)
	- - - - (968,056) (968,056)
	8,895,639 - 223,826 - (4,004,091) 5,115,374
	11,975,022 649,090 223,826 - (6,256,030) 6,591,908 - - - - (2,294,087) (2,294,087)
	- - - - (2,294,087) (2,294,087) - - 1,035,000 450,000 - 1,485,000 1,779,420 - - - - 1,779,420
	13,754,442 649,090 1,258,826 450,000 (8,550,117) 7,562,241

The above statement of changes in equity should be read in conjunction with the accompanying notes.

LACONIA RESOURCES LIMITED

ABN 72 112 320 251

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

CASH FLOWS FROM OPERATING ACTIVITIES Expenditure on mining interests Payments to suppliers and employees Interest received Research and development tax concession received Net cash outflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Sale of mining assets Purchase of mining assets Payment for plant and equipment Net cash outflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Issued capital Net cash outflow from investing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the half-year CASH AND CASH EQUIVALENTS AT THE END OF THE HALF-YEAR	2012 $ 2011 $ (1,590,463) (929,277) (439,127) (535,830) 79,970 52,001 207,670 332,682
	(1,741,950) (1,080,424)
	97,500 - (93,509) - (17,826) -
	(13,835) -
	2,145,732 -
	2,145,732 -
	389,947 (1,080,424) 926,590 2,254,218
	1,316,537 1,173,794

The above statement of cash flows should be read in conjunction with the accompanying notes.

19

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT

This condensed consolidated interim financial report for the half-year reporting period ended 31 December 2012 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

This condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2012 and any public announcements made by Laconia Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

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

Adoption of new and revised Accounting Standards

In the half-year ended 31 December 2012, the Company 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 2012.

It has been determined by the Company 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 Company accounting policies.

The Company has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2012. 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 necessary to Company accounting policies.

20

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

NOTES TO THE FINANCIAL STATEMENTS (continued)

NOTE 2: REVENUE

From continuing operations Interest revenue Other revenue Total revenue	Half-Year Consolidated 2012 $ 2011 $ 105,170 384,078 97,000 -
	202,170 384,078

NOTE 3: SEGMENT INFORMATION

Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions. For management purposes, the Group has identified two reportable segments being exploration activities undertaken in Australia and Peru. These segments include the activities associated with the determination and assessment of the existence of commercial economic reserves, from the Group’s mineral assets in these geographic locations.

Primary Reporting – geographical segments

The geographical segments of the consolidated entity are as follows:

Revenue by geographical region

Revenue attributable to the Group disclosed below, based on where the revenue is generated from:

Australia South America Total revenue Segment results by geographical region Australia South America Net loss before tax	December 2012 $ June 2011 $ 136,594 384,078 65,576 -
	202,170 384,078
	2,363,456 968,056 138,301 -
	2,501,757 968,056

21

LACONIA RESOURCES LIMITED 31 DECEMBER 2012

NOTES TO THE FINANCIAL STATEMENTS (continued)

NOTE 3: SEGMENT INFORMATION (continued)

Assets by geographical region

The location of segment assets by geographical location of the assets is disclosed below:

Australia South America Total assets	December 2012 $ June 2011 $ 7,097,625 5,191,033 638,452 -
	7,736,077 5,191,033

Liabilities by geographical region

The location of segment liabilities by geographical location of the assets is disclosed below:

			December		June
			2012		2011
			$		$
Australia			96,624		75,659
South America			77,212		-
Total liabilities			173,836		75,659
NOTE 4: EQUITY SECURITIES ISSUED
	2012	2012	2011		2011
	Shares	$	Shares		$
Issues of ordinary shares during the
half-year
Issued for cash	115,028,131	2,308,063		-		-
Issued as consideration for corporate
advisory fees	2,102,750	84,110		-		-
Share issue cost	-	(612,753)
	117,130,881	1,779,420		-		-

22

LACONIA RESOURCES LIMITED

31 DECEMBER 2012

NOTES TO THE FINANCIAL STATEMENTS (continued)

NOTE 4: EQUITY SECURITIES ISSUED (continued)

Movements of options during the half-year Issued, exercisable at 6 cents, expiring 30 September 2018	Number of options 2012 2011 49,500,000 -
	49,500,000 -

NOTE 5: SHARE BASED PAYMENT

Fair value of options issued

The assessed weighted average fair value at grant date of options granted during the half-year ended 31 December 2012 was 0.03 cents per option (2011 – Not applicable). The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The model inputs for options granted during the year ended 31 December 2012 included:

(a) 31,250,000 options issued to Directors and Senior Management for no consideration

(b) 3,250,000 options issued to Employees pursuant to Employee Incentive Option Plan

(c) exercise price: $0.06

• (d) grant date: 30 November 2012

• (e) expiry date: 30 September 2018

• (f) share price at grant date: $0.03

• (g) expected price volatility of the Company's shares: 239.90%

(h) expected dividend yield: 0%

• (i) risk-free interest rate: 2.62%

NOTE 6: CONTINGENCIES

There has been no change in contingent liabilities or contingent assets since the last annual reporting date.

NOTE 7: SUBSEQUENT EVENTS

No other matter or circumstance has arisen since 31 December 2012, which has significantly affected, or may significantly affect the operations of the Company, the result of those operations, or the state of affairs of the Company in subsequent financial years.

23

LACONIA RESOURCES LIMITED 31 DECEMBER 2012

DIRECTORS’ DECLARATION

In the directors’ opinion:

1. the financial statements and notes set out on pages 16 to 23 are in accordance with the Corporations Act 2001 , including:

2. (a) complying with Accounting Standards,the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

3. (b) giving a true and fair view of the company’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

4. there are reasonable grounds to believe that Laconia Resources Limited will be able to pay its debts as and when they become due and payable.

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

==> picture [90 x 61] intentionally omitted <==

Ian Stuart Managing Director Perth, 14 March 2013

24

25