ABN 53 121 582 607 HALF YEAR FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2011
CORPORATE INFORMATION DIRECTORS Mr Peter Meagher (Executive Chairman) Mr Neil McLachlan (Non-Executive Director) Mr James Henderson (Non-Executive Director) Mr Marshall Auerback (Non-Executive Director) COMPANY SECRETARY Mr Alan Boys BANKER Australia and New Zealand Banking Group Limited (ANZ) Allendale Square 77 St Georges Terrace Perth, WA, 6000 AUDITORS BDO Audit (WA) Pty Ltd 38 Station Street Subiaco, WA, 6008 REGISTERED OFFICE Ground Floor East, 47 Stirling Highway Nedlands, WA, AUSTRALIA, 6009 Telephone: +61 8 9386 4003 Facsimile: +61 8 9386 3004 Website: www.oklouresources.com STOCK EXCHANGE The Company s securities are quoted on the official list of the Australian Securities Exchange Limited (ASX code: OKU and OKUO). SHARE REGISTRY Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace Perth, WA, 6000
CONTENTS PAGE Directors Report 4 Auditor s Independence Declaration 8 Statement of Comprehensive Income 9 Statement of Financial Position 10 Statement of Changes in Equity 11 Statement of Cash flows 12 Notes to the Financial Statements 13 Directors Declaration 18 Independent Auditors Report 19 3
DIRECTORS REPORT The Directors present their report together with the financial statements of Oklo Resources Limited and its controlled entities ( Oklo Resources", Group ) for the half-year ended 31 December 2011. DIRECTORS The following persons held office as a Director of Oklo Resources Limited at the end of the half year: Mr. Peter Meagher (Executive Chairman) Mr. Neil McLachlan (Non-Executive Director) Mr. James Henderson (Non-Executive Director) Mr Marshall Auerback (Non- Executive Director) All the Directors shown were in office from the beginning of the half-year until the date of this report, unless otherwise stated. RESULTS The net loss of the economic entity for the half year ended 31 December 2011 was $338,071 (2010: $422,368). No dividends were paid or declared by the company during the half-year. REVIEW OF OPERATIONS The following is a summary of the activities of Oklo Resources Limited during the period 1 July 2011 to 31 December 2011. It is recommended that this half yearly report be read in conjunction with the 30 June 2011 Annual Report and any public announcements made by the Company during the year. In accordance with the continuous disclosure requirements, readers are referred to the announcements lodged with the Australian Securities Exchange regarding the activities of the Company. EXPLORATION OVERVIEW During the period, the Group s strategic focus has moved to the further evaluation of its west Mali gold concessions, with limited activity in all other areas. MALI Gold In May 2011, the group acquired a 75% interest in SOCAF sarl, which holds two concessions, Boutounguissi South and Aorou, which are located within the Mali-Senegal Shear Zone, near the regional mining centre of Kayes. During the period the following key activities were undertaken on these concessions:- 4
DIRECTORS REPORT (Continued) Interpretation of the high resolution airborne magnetic and radiometric survey revealed a significant extension of the Nreilat prospect within the Boutounguissi South concession as well as five new targets for follow up. Perth based geological consultants LBC Resources Pty Ltd ( LBC ) were engaged to review historic drilling at Boutounguissi South in the Nreilat target area which had been conducted in 2007/08 with some 15 RAB and 337 RC percussion holes. This review resulted in LBC establishing a small initial JORC Code compliant resource as set out below:- Resource Estimate Boutounguissi South Nreilat target area Classified Resource Estimate by Mineralisation Domain Reported above 0.8g/t Au cut-off Categorised according to JORC Code 2004 Classification Zone ktonnes Grade (Au g/t) Au Metal (k OZ) CM 1 Vein 127.4 1.9 7.67 Inferred CM 2 Vein 34.55 1.7 1.90 CM 3 Vein 145.86 1.4 6.47 CM 1 Low Grade 0.06.9 0.002 Total 435.33 1.7 23.72 Source: LBC Resources Pty Ltd Our Malian based geological consultants have, during the latter part of the period, been preparing and mobilising for an exploration program over the two concessions which has commenced in January 2012. Phosphate and Uranium The remote north east region of Mali, as well as other regions in the Sahal, has been subject to increased levels of social unrest since the overthrow of the Libyan government. The Group s Uranium concessions in Kidal have been under Force Majeure application for some time and due to the deteriorating position within the region hosting the Group s Samit Nord Phosphate concession, the Group has suspended any activities on this project and has made application to the Malian government for Force Majeure provisions to be invoked under the terms of its license. The Group s advisors in Mali are continuing to monitor the position with respect to both areas. AUSTRALIA Gold-Copper-Tungsten- Harts Range During the period, drilling (RC and aircore) was completed at the Tibbs gold prospect and over six regional geophysical (VTEM and magnetic) anomalies within EL 25453 which is part of the Group s Harts Range Joint Venture with Mithril Resources Limited (ASX:MTH), in which the Group has a 40% interest. 5
DIRECTORS REPORT (Continued) The RC percussion drilling targeting the sub-vertically mineralised quartz veins at the Tibbs gold prospect did not return any significant gold values. A preliminary review of the assay results from the aircore program over the regional geophysical targets indicates no significant geochemical anomalism. A complete and detailed review of all the drilling and geophysical results undertaken on the Harts Range Joint Venture is expected shortly. Rare Earths- Killi Killi South In April 2011, the Group entered into an agreement with Orion Metals Ltd (ASX:ORH) to provide Orion with the first right of refusal on a joint venture over anomalies and exploration targets identified by an aerial survey to be undertaken over EL25454 by Orion, at its cost. The aerial survey was undertaken in mid June 2011 and Orion has subsequently advised that the results of the survey were not prospective and it will not seek to have any further involvement. Given this and the Group s focus on its Mali gold project, the Group will not undertake any further activities with respect to Killi Killi South Uranium Phosphate- Burke River No exploration activities have been undertaken with respect to Burke River concession EPM 16055 during the period. The information in this report that relates to Exploration Results for the Harts Range Joint Venture is based on information compiled by Mr. G Ascough, who is a full time employee of Mithril Resources Limited and a member of the Australian Institute of Mining and Metallurgy. Mr. G Ascough has more than five years experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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 Resources and Ore Reserve. Mr G Ascough consents to the inclusion in the report in the form and context in which it appears. The information in this report that relates to Exploration Results for all other projects is based on information compiled by Oklo Resources Limited and reviewed by Mr. Nigel Maund consultant to Oklo Resources Ltd., who is a Fellow of the Australian Institute of Mining and Metallurgy. Mr. Maund has sufficient experience, which is relevant to the style of mineralization and types of deposits under consideration, and to the activity which has been undertaken, to qualify as a Competent Person as defined by the 2004 edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Maund consents to the report being issued in the form and context in which it appears. 6
CORPORATE The Group announced on 17 October 2011 an underwritten non-renounceable rights issue. The rights issue entitled security holders on 27 October 2011, for every three shares held, one new share at a price of $0.02 per share and one free attaching option with an expiry date of 30 June 2012 at an exercise price of $0.03. The issue was completed in December 2011 and raised $1.1m before costs and resulted in an additional 55,166,742 ordinary shares and 55,166,742 options on issue. SIGNIFICANT CHANGES There have been no changes in the state of affairs of the economic entity that occurred during the half-year under review not otherwise disclosed in this report. SUBSEQUENT EVENTS There has not been any matter or circumstance that has arisen since 31 December 2011, which has significantly affected, or may significantly affect the operations of the economic entity, the result of those operations, or the state of affairs of the economic entity in subsequent financial year. 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 8. Signed in accordance with a resolution of the Board of Directors. Peter Meagher Executive Chairman Date: 13 March 2012 Perth, Western Australia 7
Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au 38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia 13 March 2012 The Directors Oklo Resources Limited Ground Floor East 47 Stirling Highway Nedlands WA 6009 Dear Sirs, DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF As lead auditor for the review of Oklo Resources Limited for the half-year ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been: no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Oklo Resources Limited and the entities it controlled during the period. Phillip Murdoch Director BDO Audit (WA) Pty Ltd Perth, Western Australia BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the half-year ended 31 December 2011 Consolidated 31 December 31 December Note 2011 2010 Continuing Operations $ $ Other income 8,488 6,132 Employee benefits expense (92,717) (137,368) Professional fee expense (68,348) (108,103) Exploration expense (1,686) (10,226) Administration expense (56,382) (49,256) Travel and accommodation expense (17,537) (6,594) Occupancy expense (70,788) (62,358) Depreciation and amortisation expense (207) (5,955) Joint venture expenditure (48,341) (86,106) Results from operating activities (347,518) (459,834) Finance income 9,447 37,466 Finance costs - - Net finance income 9,447 37,466 Loss before income tax (338,071) (422,368) Income tax expense - - Loss from continuing operations (338,071) (422,368) Loss for the period attributable to the owners of Oklo Resources Limited Other comprehensive income Foreign currency translation differences for foreign operations Other comprehensive income for the period, net of income tax Total comprehensive loss for the period attributable to the owners of Oklo Resources Limited (338,071) (422,368) (494,014) (312,641) (494,014) (312,641) (832,085) (735,009) Loss per share Basic and diluted loss per share (cents per share) (0.2) (0.3) The accompanying notes form part of these financial statements. 9
CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2011 Note Consolidated CURRENT ASSETS 31 December 30 June 2011 2011 $ $ Cash and cash equivalents 1,189,293 642,892 Trade and other receivables 41,276 31,041 TOTAL CURRENT ASSETS 1,230,569 673,933 NON-CURRENT ASSETS Property, plant and equipment - 207 Mine properties exploration and evaluation 3 3,538,008 3,909,243 TOTAL NON-CURRENT ASSETS 3,538,008 3,909,450 TOTAL ASSETS 4,768,577 4,583,383 CURRENT LIABILITIES Trade and other payables 135,440 90,501 Provisions - - TOTAL CURRENT LIABILITIES 135,440 90,501 TOTAL LIABILITIES 135,440 90,501 NET ASSETS 4,633,138 4,492,882 EQUITY Contributed equity 4 13,327,812 12,414,870 Reserves (688,873) (254,259) Accumulated losses (8,465,813) (8,127,741) Capital and reserves attributable to owners of Oklo Resources Ltd 4,173,126 4,032,870 Non-controlling interest 460,012 460,012 TOTAL EQUITY 4,633,138 4,492,882 The accompanying notes form part of these financial statements. 10
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the half-year ended 31 December 2011 Consolidated Group Issued Capital ($) Accumulated losses ($) Option Reserve ($) Non- Controlling Interest ($) Translation Reserve ($) Total ($) Balance at 1 July 2010 11,414,870 (6,729,988) 255,860 - (433,207) 4,507,535 Loss for period - (422,368) - - - (422,368) Other comprehensive income Exchange differences on translation of foreign operation - - - - (312,641) (312,641) Total other comprehensive income - - - - (312,641) (312,641) Total comprehensive income - (422,368) - for the year - (312,641) (735,009) Balance at 31 December 2010 11,414,870 (7,152,356) 255,860 - (745,848) 3,772,526 Balance at 1 July 2011 12,414,870 (8,127,741) 255,860 460,012 (510,119) 4,492,882 Loss for period - (338,071) - - - (338,071) Other comprehensive income Exchange differences on translation of foreign operation - - - - (494,014) (494,014) Total other comprehensive income - - - - (494,014) (494,014) Total comprehensive income for the year - (338,071) - - (494,014) (832,085) Contributions of equity, net of transaction costs 912,942-59,400 - - 972,342 Balance at 31 December 2011 13,327,812 (8,465,813) 315,260 460,012 (1,004,133) 4,633,138 The accompanying notes form part of these financial statements. 11
Consolidated Statement of Cash Flows For the half-year ended 31 December 2011 Note Consolidated CASH FLOW FROM OPERATING ACTIVITIES 31 December 31 December 2011 2010 $ $ Payments to suppliers and employees (358,544) (427,298) Interest received 9,447 37,466 Other receipts 8,489 6,132 Net cash provided/(used) in operating activities (340,608) (383,700) CASH FLOW FROM INVESTING ACTIVITIES Recoupment of / (payments for) security deposits - 61,000 Payments for exploration (85,332) (185,583) Net cash provided/ (used) in investing activities (85,332) (124,583) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from share issue (net of share issue costs) 972,342 - Net cash provided/ (used) in financing activities 972,342 - Net increase/ (decrease) in cash held 546,402 (508,283) Cash at beginning of the period 642,892 2,308,354 Cash at end of the period 1,189,293 1,800,071 The accompanying notes form part of these financial statements. 12
Notes to the Consolidated Financial Statements For the half-year ended 31 December 2011 CORPORATE INFORMATION The consolidated financial statements of Oklo Resources Limited (the Company) for the halfyear ended 31 December 2011 was authorised for issue in accordance with a resolution of the directors on 13 March 2012. Oklo Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the Company and its subsidiaries (the Group) are described in the Directors report. Note 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation These general purpose financial statements for the half-year reporting period ended 31 December 2011 have been prepared in accordance with Australian Accounting Standard 134 Interim Financial Reporting and the Corporations Act 2001. These half-year financial statements do not include all the notes of the type normally included in annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and investing activities of the consolidated entity as the full financial statements. Accordingly, these half-year financial statements are to be read in conjunction with the annual financial statements for the year ended 30 June 2011 and any public announcements made by Oklo Resources Limited during the halfyear reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The half-year report has been prepared on an accruals basis and is based on historical costs. Going Concern This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. The consolidated entity has incurred a net loss after tax for the period ended 31 December 2011 of $338,071 (2010: $422,368) and experienced net cash outflows from operating activities of $340,608 (2010: $383,700). The Directors believe that there are sufficient funds to meet the Group s working capital requirements. However the directors recognise that the ability of the Group to continue as a going concern and to pay their debts as and when they fall due is dependent on the ability of the group to secure additional funding. The Group is confident that it will successfully raise additional funds to meet its financial obligations in the future period. 13
Notes to the Consolidated Financial Statements For the half-year ended 31 December 2011 The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period except as follows: Adoption of new and revised Accounting Standards In the half-year ended 31 December 2011, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2011. It has been determined by the Group that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies. The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2011. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Group accounting policies. Note 2: CASH AND CASH EQUIVALENTS For the purpose of the half-year statement of cash flows, cash and cash equivalents are comprised of the following: Consolidated Consolidated 31 December 30 June 2011 2011 $ $ Cash at bank and in hand 1,189,293 642,892 Note 3: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE Consolidated Consolidated 31 December 30 June 2011 2011 $ $ Exploration and Evaluation At cost 6,871,222 7,242,457 Accumulated impairment (3,333,214) (3,333,214) Total exploration and evaluation 3,538,008 3,909,243 Application has been made under the respective conventions for the enacting of Force Majeure provisions over the Group s exploration interests at Kidal and Samit Nord in Mali due to ongoing occurrences of social unrest in the immediate regions. The carrying value of exploration expenditure capitalised to these assets at 31 December 2011 is $1,132,261 and $313,189 respectively. Recoverability of these balances will be dependent on gaining secure access to these sites in the future. 14
Notes to the Consolidated Financial Statements For the half-year ended 31 December 2011 Note 4: SHARE CAPITAL 31 December 2011 30 June 2011 Number of $ Number of $ Shares Shares Opening balance 165,500,225 12,414,870 145,500,225 11,414,870 Shares issued 55,166,742 1,103,335 20,000,000 1,000,000 Capital raising costs - (190,393) - - Closing Balance 220,666,967 13,327,812 165,500,225 12,414,870 Note 5: SEGMENT INFORMATION At 30 June 2011 the segment information reported was analysed on the basis of geographical region (Australia and Mali). During the period to 31 December 2011, the Group s management reporting has remained unchanged. Information regarding these segments is presented below. The accounting policies of the reportable segments are the same as the Group s accounting policies. The following is an analysis of the Group s revenue and results by reportable operating segment for the review periods: Australia Mali Group 2011 $ 2010 $ 2011 $ 2010 $ 2011 $ 2010 $ Segment revenue - - - - - - Exploration expense (1,686) (10,226) - - (1,686) (10,226) Capitalised exploration expenditure written off - - - - - - Segment result (1,686) (10,226) - - (1,686) (10,226) Other income 8,488 6,132 Employee benefits expense (92,717) (137,368) Professional fee expense (68,347) (108,103) Administration expense (56,382) (49,256) Travel and accommodation (17,537) (6,594) expense Occupancy expense (70,788) (62,358) Depreciation and amortisation expense (207) (5,955) Finance income 9,447 37,466 Joint venture expenditure (48,341) (86,106) Loss before income tax (338,071) (422,368) The following is an analysis of the Group s assets by reportable operating segment: 31 December 2011 30 June 2011 Segment assets $ $ Australia 1,384,741 876,926 Mali 3,383,836 3,706,457 Total assets 4,768,577 4,583,383 15
Notes to the Consolidated Financial Statements For the half-year ended 31 December 2011 Note 6. DIVIDENDS No dividends were paid or declared by the company during the half-year. Note 7. CONTINGENCIES There are no contingent assets or liabilities. Note 8: COMMITMENTS Consolidated Group 31 December 2011 $ (a) Capital expenditure commitments No capital expenditure commitments were contracted for at balance date. (b) Mineral tenement commitments In order to maintain the current rights of tenure to exploration tenements, the Company has the following discretionary expenditure requirements. If the Company decides to relinquish certain tenements it will have no obligations with respect to further expenditure. Further, these obligations are subject to renegotiation and may be reduced by applying for exemptions in certain cases. These amounts are not provided for in the accounts. - Within one year 952,300 - Later than one year but not later than five years - Later than five years - - Aggregate mineral tenement expenditure contracted for at balance date 952,300 (c) Lease expenditure commitments (i) Operating leases (non-cancellable): Minimum lease payments - Within one year 73,755 - Later than one year but not later than five years - - Later than five years - Aggregate lease expenditure contracted for at balance date 73,755 (d) Services commitments - Within one year - - Later than one year but not later than five years - Later than five years - - Aggregate service commitments contracted for at balance date - 16
Notes to the Consolidated Financial Statements For the half-year ended 31 December 2011 Note 9: RELATED PARTY TRANSACTIONS The Company engaged the services of Transocean Securities Pty Ltd ( Transocean ), a company of which a director of the Company, Mr James Henderson, is a director and has a financial interest, to provide underwriting and corporate advisory services in relation to the Company s capital raising pertaining to the rights issue. Under the terms of an Underwriting Agreement, the Company was to pay to Transocean an amount of 6% of the underwritten amount of the rights issue as an Underwriting Fee, an amount of $25,000 as a Corporate Advisory Fee, and an amount of 1% of the underwritten amount of the rights issue as a Co-Ordination Fee. The total amount charged by Transocean in relation to the rights issue was $102,233 (net of GST). In addition to these fees, and as per the Underwriting Agreement, Transocean are to be issued six million unlisted options in Oklo. The options will have an exercise price of $0.04 per share and an expiry date of two years from the date of issue. These options are to be issued subject to obtaining shareholder approval and at the date of this report have not been issued. The options have been valued independently using an option pricing model and have been given a total market value of $59,400, which has been booked as a cost of equity in the six months ended 31 December 2011. The values and inputs to the option pricing model were as follows: Options granted: 6,000,000 Value per option: $0.0099 Life of the option: 2 years Risk-free rate: 3.63% Volatility: 90%. Note 10 EVENTS SUBSEQUENT TO REPORTING DATE There has not been any matter or circumstance that has arisen since 31 December 2011, which has significantly affected, or may significantly affect the operations of the economic entity, the result of those operations, or the state of affairs of the economic entity in subsequent financial year. 17
Directors Declaration In the directors opinion: (a) the financial statements and notes set out on pages 9 to 17 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, AASB 134 Interim Financial Reporting, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) giving a true and fair view of the consolidated entity s financial position as at 31 December 2011 and of its performance. (b) there are reasonable grounds to believe that Oklo 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 Board of directors made pursuant to S305 (5) of the Corporations Act 2001. Peter Meagher Executive Chairman Perth 13 March 2012 18
Tel: +8 6382 4600 Fax: +8 6382 4601 www.bdo.com.au 38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia INDEPENDENT AUDITOR S REVIEW REPORT TO THE MEMBERS OF Report on the Half-Year Financial Report We have reviewed the accompanying consolidated half-year financial report of Oklo Resources Limited, which comprises 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, notes comprising a statement of accounting policies and other explanatory information, and the directors declaration of the consolidated entity comprising the disclosing entity 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 disclosing entity are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity s financial position as at 31 December 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 Oklo Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Oklo Resources Limited, would be in the same terms if given to the directors as at the time of this auditor s report. BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
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 Oklo Resources Limited is not in accordance with the Corporations Act 2001 including: (a) (b) giving a true and fair view of the consolidated entity s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001. Emphasis of Matter Without modifying our conclusion, we draw attention to Note 1 in the half-year financial report which indicates that the consolidated entity incurred a net loss of $338,071 during the period ended 31 December 2011 and that the consolidated entity will require additional funding to continue as a going concern. These conditions, along with other matters as set forth in Note 1, 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. Emphasis of Matter We draw attention to the recoverability of the consolidated entity s Kidal and Samit exploration assets as disclosed in note 3. The recoverability of the exploration assets is dependent upon the current security conditions improving, allowing access to the areas. Should the consolidated entity not be able to access the areas in order to develop the areas of interest, significant uncertainty may exist over the consolidated entity s ability to realise the assets at the value recorded in the consolidated statement of financial position. Our conclusion is not modified in respect of this matter. BDO Audit (WA) Pty Ltd Phillip Murdoch Director Perth, Western Australia Dated this 13 th day of March 2012