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Peak ResouRces Limited and its contRoLLed entities

HaLf-YeaR financiaL RePoRt31 December 2010

OPPORTUNITYDISCOVERYGROWTH

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TABLE OF CONTENTS

Corporate Directory...................................................................................................... 3

Directors’ Report .......................................................................................................... 4

Condensed Consolidated Statement of Comprehensive Income ................................ 9

Condensed Consolidated Statement of Financial Position ........................................ 10

Condensed Consolidated Statement of Cash Flows.................................................. 11

Condensed Consolidated Statement of Changes in Equity ....................................... 12

Notes to Condensed Financial Statements................................................................ 13

Directors’ Declaration................................................................................................. 18

Auditors’ Independence Declaration .......................................................................... 19

Independent Auditors’ Review Report........................................................................ 20

PEAK RESOURCES LIMITED – HALF YEAR REPORT

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Corporate Directory

DIRECTORS

Alastair Hunter Chairman Mark Maine Executive Director Dave Hammond Executive Director COMPANY SECRETARY Mark Maine REGISTERED OFFICE Level 1 11 Ogilvie Road Mt Pleasant WA 6153 SOLICITORS TO PEAK RESOURCES Price Sierakowski Level 24, St Martin’s Tower 44 St Georges Terrace PERTH WA 6000 Ako law 11th floor Exim Tower Ghana Avenue Dar es Salaam, Tanzania AUDITORS Deloitte Touche Tohmatsu Woodside Plaza 240 St Georges Terrace Perth WA 6000 SHARE REGISTRY Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000

CONTACT DETAILS Website: www.peakresources.com.au Email: [email protected] Telephone: (08) 9316 9599 Facsimile: (08) 9316 9588 STOCK EXCHANGE LISTING Australian Securities Exchange Limited Home Exchange: Perth, Western Australia Code: PEK


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Directors’ Report Your directors of Peak Resources Limited (the “company”) submit herein their half year report for the period ended 31 December 2010. DIRECTORS

The names of the company’s directors in office during the period and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

• Alistair Hunter (Chairman) • Mark Maine (Executive Director) • Dave Hammond (Executive Director – appointed 25 October 2010) • Rodney Foster (Non-executive Director – resigned 20 October 2010) • Paul Price (Non-executive Director – appointed 20 October 2010; resigned – 25 October 2010)

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activity of the Group during the half year was exploration for and evaluation of mineral resources in Australia and Tanzania.

REVIEW AND RESULTS OF OPERATIONS

Ngualla Project (Peak earning 80% from Zari Exploration) Commodities – Rare Earths, Niobium, Tantalum, Phosphate The Company’s main focus during the period has continued to be the evaluation of the Ngualla Project in southern Tanzania where early stage surface sampling and exploration drilling by Peak identified significant Rare Earth Oxide (REO – including yttrium), niobium-tantalum and phosphate mineralisation. A reverse circulation (RC) – diamond drilling program was undertaken in November/December to follow up encouraging bedrock intersections reported in September 2010 from the drilling programme that was completed in late July. The Ngualla Carbonatite is a roughly circular volcanic pipe with a diameter of approximately 3.8km. A central north south orientated ridge is surrounded by areas covered in alluvium up to 30m thick. Some of the mineralisation at Ngualla is similar in style to that at Mt Weld (Lynas Corporation Ltd) in Western Australia and Zandkopsdrift (Frontier Rare Earths Ltd) in South Africa, being REO, phosphate and tantalum – niobium enrichment in a deeply developed regolith profile above a large carbonatite. Mineralisation is also contained in the extensive alluvial deposits around the central hills of weathered carbonatite. Prior to Peak’s work, there had been no drilling within the Project. Peak commenced exploration of the carbonatite in late 2009 and has already completed surface sampling, mapping, an airborne geophysical survey and two significant phases of drilling. Peak continues to be encouraged by the results to date, which indicate significant upside to the Project and will continue to aggressively explore Ngualla this coming field season. It is anticipated that substantial RC and diamond drilling programs will be carried out within the central bedrock core and the alluvial sediments sufficient to define an initial JORC resource for the REO mineralisation. Following the completion of drilling in July the Company announcement on 27th September 2010 the results from four shallow reconnaissance RC holes. All four of the reconnaissance holes returned significant intersections in weathered bedrock from surface to end of hole including:


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NRC001: 40m at 3.21% REO from surface to eoh. NRC002: 20m at 3.70% REO from surface to eoh. NRC003: 30m at 0.38% Nb2O5 and 150ppm Ta2O5 from surface to eoh with the hole also

ending in 26m at 14.7% phosphate. NRC004: 24m at 0.39% Nb2O5 and 128ppm Ta2O5 from surface to eoh. These results suggest the potential for a significant bedrock source to the surrounding alluvial mineralisation identified by the initial aircore drilling program. They were especially encouraging considering the wide spaced nature of the RC holes, the broad intersections returned and the fact that mineralisation remains open with depth. Following analysis of the results the Company mobilised for an exploration drilling programme on the central area of the Project involving RC and diamond drilling. This programme, which commenced in November, was halted by the onset of the rainy season earlier than was planned and drilling will recommence in April or May 2011 in order to complete the program objectives. Drill rig production was also reduced by mechanical problems and difficult ground conditions, which were partially addressed by the addition of a third, larger capacity, drilling rig. Despite the production issues, three diamond and eighteen angled RC holes were completed, including a 600m long drill traverse across the centre of the REO surface anomaly, with holes up to 110m in depth. The drilling indicates the carbonatite to be variably weathered, with some holes remaining in highly weathered clay saprolite at depths of 100m. This is encouraging as at Mt Weld and Zandkopsdrift, REO’s are concentrated in certain parts of the regolith profile. As well as providing information as to the depth and lateral extent of the mineralisation, the drilling will provide samples for mineralogical test work on the mineralised material for use in future metallurgical studies that will be a key to unlocking the potential value of this Project. The results from the programme were received in February 2011 and provided a number of broad higher grade intercepts including: Southern Zone NRC011 64m at 5.48% REO from surface NRC015 34m at 7.30% REO from surface NRC007 22m at 4.76% REO from surface Northern Zone NDO003 62.3m at 0.70% Nb2O5 and 245ppm Ta2O5 from surface and 60.85m at 21.0%

phosphate from 1.46m. NRC021 22m at 0.91% Nb2O5 and 213ppm Ta2O5 from surface to eoh and 14m at

20.6% phosphate from 8m to eoh. NDD002 5.15m at 1.64% Nb2O5, 214ppm Ta2O5 and 5.15m at 25.4% phosphate from

51m. The Company plans to aggressively expand its drilling activities at Ngualla as soon as possible after the rainy season ends in April 2011. Alluvial Deposits The results from the 373 hole aircore 5,942m aircore drilling program completed in late July were received during the period. Results from the programme confirm extensive zones of REO, niobium-tantalum and / or phosphate mineralisation in the alluvial sediments, and also phosphate in the weathered bedrock beneath. The alluvial deposits are up to 30m thick and surround the central hills of outcropping weathered carbonatite that are the focus of the latest RC and diamond drilling program. a) Alluvial REO Mineralisation Mineralisation above 1% REO occurs from surface in unconsolidated sediments and is generally 4 to 10m in thickness. Higher grade mineralisation of >2% REO has been identified by the aircore drilling within an alluvial channel to average depths of 12m over a 550m x 350m area to the southwest of Mt Ngualla. Intersections from this area include:


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NAC082: 28m at 3.27% REO from surface* NAC362: 20m at 2.97% REO from surface NAC366: 12m at 3.57% REO from surface to eoh NAC085: 12m at 3.50% REO from surface* *=details reported in September 2010 quarterly report. The higher grade zone is open and untested for a further 250m to 450m to the northeast, where grades increase towards the apparent bedrock source of the REO’s at Mt Ngualla. b) Alluvial and Bedrock Phosphate Mineralisation Extensive areas of moderate grade phosphate mineralisation were identified by the blade refusal aircore drilling program. Grades of 10 to 20% phosphate (P2O5) were returned from both the transported alluvial cover and the weathered bedrock (saprolite). Large untested areas of high tenor phosphate anomalism in surface sampling around and to the north of Mt Ngualla. The areas of +10% phosphate mineralisation extend over several square kilometres, forming a concentric zone around Mt Ngualla. The aircore program returned intersections up to: NAC348: 8m at 11.7% phosphate from surface (alluvial) and 12m at 15.7% phosphate from 14m (weathered bedrock). NAC341: 17m at 13.4% phosphate from 4m to eoh (alluvial and weathered bedrock). NAC327: 18m at 13.1% phosphate from surface to eoh (alluvial and weathered bedrock). NAC452: 8m at 14.6% phosphate from 16m (weathered bed rock). Phosphate potential is also identified by reconnaissance RC drill hole NRC003, which returned 26m at 14.7% phosphate from 4m to eoh. The potential of this area of bedrock phosphate mineralisation remains untested to the north, east, west and with depth. Most phosphate rock is commonly sold at a grade close to 30% P2O5. Studies to investigate the mineralogy of both the alluvial and saprolite - hosted phosphate mineralisation will be completed prior to beneficiation test work. Peak has appointed Bateman Engineering to manage this initial mineralogical and metallurgical evaluation. c) Alluvial Niobium - Tantalum Mineralisation The aircore drilling results identify large areas of alluvial material containing >0.25% Nb2O5 and associated elevated tantalum (Figure 6) surrounding Mt Ngualla. Better intersections returned from the program include: NAC270: 9m at 0.54% Nb2O5 and 126ppm Ta2O5 from surface. NAC280: 10m at 0.51% Nb2O5 and 148ppm Ta2O5 from surface. NAC333: 10m at 0.57% Nb2O5 and 129ppm Ta2O5 from 4m. NAC378: 16m at 0.50% Nb2O5 and 44ppm Ta2O5 from 4m to eoh. At a 0.25% lower grade cut-off, the niobium – tantalum zone identified by aircore drilling to date is more extensive than the REO mineralisation, covering an area of over two square kilometres and remaining open in several directions. Large areas of alluvial material remain untested by drilling. As with the REO and phosphate mineralisation, mineralogical test work will be completed to evaluate possible beneficiation routes for the alluvial hosted niobium – tantalum mineralisation prior to further drilling. Next stage work, Ngualla The Company looks forward to aggressively expanding its drilling activities at Ngualla as soon as possible after the rainy season ends towards the end of April. The priority focus of future drilling will be to test both the bedrock and alluvial Rare Earth zones of mineralisation with the objective of providing sufficient data for an initial resource estimate. Mineralogical and preliminary metallurgical studies will be undertaken on the various REO, phosphate and niobium – tantalum mineralisation styles (bedrock and alluvial) as a first step towards assessing the economic potential of the material types identified to date. Metallurgy, including beneficiation, is a


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key driver for development time and capital and operating costs for Rare Earth projects. Peak has engaged the services of well-known carbonatite and rare earth consulting mineralogist Dr Roger Townend to investigate the mineralogy of the REO-rich alluvials prior to initial metallurgical test work under the guidance of Bateman Engineering Pty Ltd. Airborne Geophysical Survey Processed images of the magnetic, radiometric and terrain data acquired during the airborne geophysical survey flown in September 2010. The detailed data is proving invaluable in this area of often poor outcrop as it directly maps concentric compositional zonation within the carbonatite complex and also major cross cutting structures, some of which control the distribution of the various mineralisation types. When combined with data from drilling, surface geochemical surveys and geological mapping, the new geophysical data will be an important aid in planning and prioritising future drilling programs at Ngualla. Fort Ikoma Peak Resources –Operator Manager, earning 75% The Fort Ikoma licence lies in the north eastern Lake Victoria Goldfields and covers a 6km x 9km area of limited outcrop. Reconnaissance soil sampling was completed over the entire licence in October with a total of 550 samples collected at a spacing of 400m x 200m. Assay results have now been received and identify two coherent gold in soil anomalies and four single point anomalies with gold values ranging between 9ppb to 34ppb compared to a background of 2ppb.These results could be significant considering the current wide sample spacing. Follow-up soil sampling is planned over the gold anomalous areas in early 2011. Nkerege (North Mara) Peak Resources – Operator Manager, earning 75% Archaean rocks are exposed on the steep face of the Kegonga Escarpment within this licence situated in the North Mara greenstone belt. A program of 40 stream sediment and soil samples was completed in October, with samples collected from the foot of the escarpment and assay results have now been received. Two samples, one of 45ppb gold and the other of 23ppb gold are anomalous and lie within a trend of elevated gold values ranging from 10 to 14ppb compared to the background 6ppb gold. Follow-up work is planned consisting of topographical and geological mapping with fill-in stream sediment and rock sampling. Igurubi Project Peak Resources acquiring 75% as Operator Manager No field work was undertaken during the period as under the terms of the acquisition, African Eagle must deliver granted tenements before settlement. African Eagle has lodged renewals and there are no competing applications. The Company must obtain ministerial grant prior to commencing work. Western Australian Projects Three Rivers Project EL52/1663 (Peak Resources 100%) The Three Rivers Project is located 130kms NNE of Meekatharra in Western Australia and is bounded on the east and southeast by Sandfire Resources Doolgoona Project, and to the south by Alchemy Resources. The project lies approximately 25km along strike to the west of Sandfire’s De Grussa copper-gold discovery. A consultant’s report on the results of the TEM geophysical survey completed in September 2010 has now been received. The survey did not identify any anomalies indicative of highly conductive sulphide mineralisation within the Narracoota Volcanics. Zones of moderate conductivity are located within the Peak Hill Schists to the west. These zones, together with copper and gold anomalies in wide spaced surface sampling, will be the focus of further work in the project. Menzies Gold Project (Peak Resources 100%) During the quarter Peak received $336,536 from the sale of a low grade ore dump to Paddington Gold Mine Pty Ltd. The sale of the low grade material also assisted in rehabilitating the area of the old mine


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site. RESULTS OF OPERATIONS AND FINANCIAL POSITION

The operating loss after income tax of the Group for the half year ended 31 December 2010 was $459,017 (2009 $968,257). The loss for the current and prior period was impacted by write off of capitalised exploration costs.

The net assets of the Group increased by $2,969,807 to $7,957,005 at 31 December 2010 (30 June 2010: $4,987,198). This largely the result of equity raised during the period.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Group during the half year not otherwise dealt with in this report and the financial statements.

SIGNIFICANT EVENTS AFTER BALANCE DATE

On 3rd of February 2011 the Company announced that it would seek shareholder approval for the issue of securities to certain directors and employees. Approvals will be sort for the issue of 1,000,000 fully paid shares, three tranches of 750,000 options exercisable at $0.60, $0.90 and $1.20 respectively exercisable within 24 months from the date of issue and expiring 48 months from the date of issue. Further the grant of two tranches of 500,000 options exercisable at $0.60 and $1.00 respectively and a third tranche of 1,000,000 options exercisable at $1.50 with all options exercisable within 24 months of vesting, with the three tranches vesting on approval, from 26 May 2011 and 26 May 2012 respectively.

SHARES AND OPTIONS

During the period the company issued 5 million shares at 46 cents raising $2.3 million. An additional $1.25 million was raised through conversion of 22,683,439 options exercised at 5 cents, and 600,000 options exercised at 20 cents.

The company had 142,899,233 shares on issue at 31 December 2010 (30 June 2010: 114,615,794).

The company had no options outstanding at 31 December 2010 (30 June 2010: 22,994,208 5 cent options and 600,000 20 cent options. Both expired at 31 December 2010).

AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration for the year ended 30 June 2010 has been received and is noted in page 19.

Signed in accordance with the resolution of the Directors

Alastair Hunter Chairman Perth, Western Australia, 15 March 2011 The information in this report that relates to Exploration Results is based on information compiled and/or reviewed by Dave Hammond who is a Member of The Australasian Institute of Mining and Metallurgy. Dave Hammond is the Technical Director of the Company. He has sufficient 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 Reserves. Dave Hammond consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.


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Condensed Consolidated Statement of Comprehensive Income For the half year ended 31 December 2010

31 Dec 2010 31 Dec 2009

$ $ Continuing operations Finance income 76,333 16,975 Project management revenue 336,536 - Other income 2,760 6,176 415,629 23,151 Employee benefits expenses (115,948) (87,178) Depreciation and amortisation (23,903) (23,981) Impairment of capitalised exploration costs (380,128) (692,669) Administration and other expenses (354,667) (187,580) Loss before income tax (459,017) (968,257) Income tax benefit / (expense) - - Net loss after tax (459,017) (968,257) Other comprehensive income Movement in foreign currency translation reserve 421 - Total comprehensive income (458,596) (968,257) Loss per share (in cents) Basic and diluted for the period (0.38) (1.10)

PEAK RESOURCES LIMITED – ANNUAL REPORT

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Condensed Consolidated Statement of Financial Position As at 31 December 2010

31 Dec 2010

30 Jun 2010

$ $ ASSETS Current assets Cash and cash equivalents 4,736,383 3,139,693 Trade and other receivables 210,044 100,863 Prepayments 48,106 2,269 Total current assets 4,994,533 3,242,825 Non-current assets Property, plant and equipment 99,443 102,679 Deferred exploration and evaluation costs 3,084,471 1,914,698 Total non-current assets 3,183,914 2,017,377 Total assets 8,178,447 5,260,202 LIABILITIES Current liabilities Trade and other payables 221,442 273,004 Total current liabilities 221,442 273,004 Total liabilities 221,442 273,004 Net assets 7,957,005 4,987,198 EQUITY Contributed equity 14,828,554 11,400,151 Reserves 196,733 196,312 Accumulated losses (7,068,282) (6,609,265) Total equity 7,957,005 4,987,198


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Condensed Consolidated Statement of Cash Flows For the half year ended 31 December 2010

31 Dec 2010

31 Dec 2009

$ $ OPERATING ACTIVITIES Payments to suppliers and employees (674,434) (318,679) Interest received 76,333 16,974 Management fee received 336,536 - Cash generated / (used) in operating activities (261,565) (301,705) INVESTING ACTIVITIES Purchase of plant and equipment (20,667) (117) Exploration and evaluation expenditure (1,549,901) (350,070) Cash generated / (used) in investing activities (1,570,568) (350,187) FINANCING ACTIVITIES Proceeds from issue of equity 3,554,171 886,290 Cost of raising equity (125,769) (49,173) Cash generated / (used) in financing activities 3,428,402 837,117 Net increase/(decrease) in cash and cash equivalents 1,596,269 185,225 Effect of foreign currency translation 421 - Cash and cash equivalent at the beginning of the period 3,139,693 1,089,197 Cash and cash equivalent at the end of the period 4,736,383 1,274,422


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Condensed Consolidated Statement of Changes in Equity For the half year ended 31 December 2010

Contributed

equity

Share based

payment reserves

Foreign Currency

Translation Reserve

Accumulated losses Total equity

$ $ $ $ At 1 July 2009 7,724,854 196,313 - (5,211,820) 2,709,347 Loss for the half year - - (968,257) (968,257) Other comprehensive income - - - - - Total comprehensive income for the half year - - - (968,257) (968,257) Equity issued during the period 886,290 - - 886,290 Transaction costs (49,173) - - (49,173) At 31 December 2009 8,561,971 196,313 - (6,180,077) 2,578,207 At 1 July 2010 11,400,151 196,312 - (6,609,265) 4,987,198 Loss for the half year - - (459,017) (459,017) Other comprehensive income - - 421 - 421 Total comprehensive income for the half year - - 421 (459,017) (458,596) Equity issued during the period 3,554,172 - - 3,554,172 Transaction costs (125,769) - - (125,769) At 31 December 2010 14,828,554 196,312 421 (7,068,282) 7,957,005


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Notes to Condensed Financial Statements 1. CORPORATE INFORMATION

The half year financial report of the group comprising of Peak Resources Limited and its controlled entities for the period ended 31 December 2010 was authorised for issue in accordance with a resolution of the directors.

Peak Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

The principal activity of the Group during the half year was exploration for and evaluation of mineral resources in Australia and Tanzania.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Statement of compliance

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

(b) Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except where stated otherwise. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the company’s 2010 annual financial report for the financial year ended 30 June 2010, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

(c) New standards and interpretations effective for the current period

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period. New and revised Standards and amendments thereof and Interpretations effective for the current reporting period that are relevant to the Group include: • Amendments to AASB 5, 8, 101, 107, 117, 118, 136 and 139 as a consequence of AASB

2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project

AASB 2009-5 Introduces amendments into Accounting Standards that are equivalent to those made by the IASB under its program of annual improvements to its standards. A number of the amendments are largely technical, clarifying particular terms, or eliminating unintended consequences. Other changes are more substantial, such as the current/non-current classification of convertible instruments, the classification of expenditures on unrecognised assets in the statement of cash flows and the classification of leases of land and buildings. The adoption of these amendments has not resulted in any changes to the Group’s accounting policies and has no affect on the amounts reported for the current or prior periods.


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(d) Critical accounting judgements and key sources of estimation uncertainty

In the application of Australian Accounting Standards, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Impairment of deferred exploration and evaluation costs The future recoverability of deferred exploration and evaluation costs are dependent on a number of factors, including the level of proved, probable and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environment restoration obligations) and changes to commodity prices. To the extent that deferred exploration and evaluation costs is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

3. COMPONENTS OF THE GROUP The half-year consolidated financial statements comprise the financial statements of Peak Resources Limited and its controlled subsidiaries (‘the Group’). The Group comprise of:

Extent of Parent's interests

Entity Country of

Incorporation 31-Dec-10 30-Jun-10 31-Dec-09 Peak Resources Ltd [Parent] Australia - - PRL Pty Ltd * Australia 100% 100% 100% Pan African Exploration Pty Ltd Australia 100% 100% 100% Peak Hill Gold Mines NL Australia 100% 100% 100% Redpalm Pty Ltd Australia 100% 100% 100% Peak Resources (Tanzania) Ltd Tanzania 100% -% -%

* Considered as the parent for accounting purposes on account of the application of reverse acquisition.

4. SEGMENT INFORMATION The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the type of product and service. As of the date of this report and during the six months to 31 December 2010 the Group operates predominantly in the exploration and evaluation of mineral resources. The operating segments are identified based on the size of the exploration tenements.


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5. CONTRIBUTED EQUITY CONSOLIDATED 31 Dec 2010 30 Jun 2010 Nos. $ Nos. $ Movement of ordinary shares on issue: Balance at the beginning of the year 114,615,794 11,596,463 83,230,002 7,921,167 Issued on 13 October 2009 ($0.08) - - 10,600,000 848,000 Issued on 19 January 2010 ($0.15) - - 20,000,000 3,000,000 Issued on 7 October 2010 ($0.46) 5,000,000 2,300,000 - - Option Conversion ($0.05) 22,683,439 1,134,172 785,792 39,289 Option Conversion ($0.20) 600,000 120,000 - - Equity issue costs - (125,769) - (211,993) Balance at the end of the year 142,899,233 15,024,866 114,615,794 11,596,463 Fully paid ordinary shares carry one vote per share and carry a right to dividends.

CONSOLIDATED

5 cents options expiring

31/12/2010 25 cents options

expiring 30/09/2009 20 cents options

expiring 31/12/2010

31 Dec 2010

30 Jun 2010

31 Dec 2010 30 Jun 2010

31 Dec 2010

30 Jun 2010

Nos. Nos. Nos. Nos. Nos. Nos. Movement in options outstanding: Balance at the beginning of the period 22,994,208 23,780,000 - 32,675,001 600,000 600,000 Issued during the period - - - - - - Exercised during the period (22,683,439) (785,792) - (600,000) - Lapsed during the period (310,769) - - (32,675,001) - - Balance at the end of the period - 22,994,208 - - - 600,000

6. COMMITMENTS AND CONTINGENCIES Lease commitments The company has committed to an office lease of $27,750 per annum to 18 March 2012. CONSOLIDATED 31-Dec-10 30-Jun-10 $ $ Lease commitments: Up to 1 year 27,750 27,750

1 to 5 years

5,854 20,810 Beyond 5 years - - 33,604 48,560


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Tenement commitments The Group has a portfolio of tenements located in Western Australia and is earning interests in licences located in Tanzania which have a requirement for a certain level of expenditure each and every year in addition to annual rental payments for the tenements.

At 31 December 2010 annual expenditure commitments in respect of exploration assets amounted to $275,674 (30 June 2010: $232,896). These mineral commitments are subject to provisions of legislation governing the granting of mineral exploration licences. Commitments may be varied in accordance with the provisions of governing regulations or obligations may be farmed out under agreements with third parties.

Otherwise, since the last annual report date, there has been no material change to any contingent liabilities or contingent asset. Capital commitments At 31 December 2010, the Group had no capital commitments. At the 31 December 2010 the Group had commitments under farm in agreements $255,454 (30 June 2010: $204,545) which includes minimum annual committed expenditure in respect of Tanzanian exploration assets. Asset acquisition On 6 April 2010 The Group entered into a conditional agreement for the acquisition of a 75% interest in certain exploration assets from African Eagle plc. The terms of the conditional acquisition require the issue of securities within 13 days of satisfaction of conditions precedent and include:

1. the payment of $250,000 in ordinary shares based upon the VWAP of Peak Resources Limited shares trading on ASX in the five trading days prior to the announcement date (7 April 2010);

2. Payment of $500,000 in Peak ordinary fully paid shares based on the VWAP of Peak Resources Limited shares trading on ASX during the five trading days immediately preceding the later of (i) The date the mineral licence application referred to in the agreement is granted or

offered; or (ii) The first anniversary of completion.

The agreement further provides for the payment of $1 per ounce of proved resource greater than 500,000 oz of gold, $1m on commencement of production from the project and a 2% NSR. Under the agreement the Group is to expend US$500,000 on exploration within 12 months from conditions satisfaction date and an additional US$1,000,000 prior to 30 April 2012. The group may withdraw from the project and transfer the assets to African Eagle plc for no consideration at any time whereupon its obligation under the agreement will cease. Contingencies At 31 December 2010, the Group had no contingencies.

7. RELATED PARTIES Arrangements with related parties continue to be in place. Other than as set out below, for details of these arrangements, refer to the 30 June 2010 Annual Financial Report.

Mr D Hammond was appointed Technical Director of the Company on 25 October 2010. Under the terms of his engagement Mr. Hammond will receive a salary of $223,450pa for his services.


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8. EVENTS AFTER BALANCE SHEET DATE On 3rd of February 2011 the Company announced that it would seek shareholder approval for the issue of securities to certain directors and employees. Approvals will be sort for the issue of 1,000,000 fully paid shares, three tranches of 750,000 options exercisable at $0.60, $0.90 and $1.20 respectively exercisable within 24 months from the date of issue and expiring 48 months from the date of issue. Further the grant of two tranches of 500,000 options exercisable at $0.60 and $1.00 respectively and a third tranche of 1,000,000 options exercisable at $1.50 with all options exercisable within 24 months of vesting, with the three tranches vesting on approval, from 26 May 2011 and 26 May 2012 respectively.

No other matter or circumstance has arisen since 31 December 2010 that has significantly affected, or may significantly affect, the operations or the state affairs of the Group.


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Directors’ Declaration The directors of Peak Resources Limited declare that:

(a) 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; and

(b) In the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.

Signed in accordance with a resolution of the directors made pursuant to s303(5) of the Corporations Act 2001.

On behalf of the Directors

Alastair Hunter Chairman Perth, Western Australia. 15 March 2011

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

19

Deloitte Touche Tohmatsu

ABN 74 490 121 060

Woodside Plaza

Level 14

240 St Georges Terrace

Perth WA 6000

GPO Box A46

Perth WA 6837 Australia

DX: 206

Tel: +61 (0) 8 9365 7000

Fax: +61 (8) 9365 7001

www.deloitte.com.au

The Board of Directors

Peak Resources Limited

Level 1

11 Ogilvie Road Mt Pleasant WA 6153

15 March 2011

Dear Board Members

Peak Resources Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration

of independence to the directors of Peak Resources Limited.

As lead audit partner for the half year review of the financial statements of Peak Resources Limited for the

financial period ended 31 December 2010, I declare that to the best of my knowledge and belief, there have been

no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

(ii) any applicable code of professional conduct in relation to the review.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Conley Manifis Partner

Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

20

Deloitte Touche Tohmatsu

ABN 74 490 121 060

Woodside Plaza

Level 14

240 St Georges Terrace

Perth WA 6000

GPO Box A46

Perth WA 6837 Australia

DX: 206

Tel: +61 (0) 8 9365 7000

Fax: +61 (8) 9365 7001

www.deloitte.com.au Independent Auditor’s Review Report

to the Members of Peak Resources

Limited

We have reviewed the accompanying half-year financial report of Peak Resources Limited, which comprises the

condensed statement of financial position as at 31 December 2010, and the condensed statement of comprehensive

income, the condensed statement of cash flows and the condensed statement of changes in equity for the half-year

ended on that date, selected explanatory notes and, the directors’ declaration of the consolidated entity comprising

the company and the entities it controlled at the end of the half-year or from time to time during the half-year as

set out on pages 9 to 18.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true

and fair view in accordance with 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 Peak

Resources Limited’s financial position as at 31 December 2010 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 Peak 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.

Auditor’s Independence Declaration

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 Peak Resources Limited, would be in the same terms if given to the directors as at the time of this

auditor’s review report.

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that

the half-year financial report of Peak 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 2010 and of its

performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations

Regulations 2001.

DELOITTE TOUCHE TOHMATSU

Conley Manifis

Partner

Chartered Accountants

Perth, 15 March 2011

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