ABM RESOURCES NL AND ITS CONTROLLED ENTITIES

ABN 58 009 127 020

INTERIM FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

CORPORATE DIRECTORY

Directors

Mr I G Kins Mr T J King Mr D Reynolds

Secretary

Mr T J King

Auditors

BDO Chartered Accountants & Advisers Level 8, 256 St George's Terrace Perth WA 6000

Bankers

Commonwealth Bank of Australia Head Office 50 St George's Terrace PERTH WA 6000

Share Registry

Security Transfer Registrars Pty Limited 770 Canning Highway APPLECROSS WA 6153 Telephone: +61 9315 2333

Solicitors

Steinepreis Paganin Level 4, Next Building 16 Milligan Street Perth WA 6000

Stock Exchange

Australian Stock Exchange Limited Code: ABU

Registered Office

Level 1, 141 Broadway NEDLANDS WA 6009

Principle Office

Level 1, 141 Broadway NEDLANDS WA 6009 Telephone: +61 8 9423 9777 Fax: +61 8 9423 9733 Website: www.abmresources.com.au Email: [email protected]

Postal Address

Level 1, 141 Broadway NEDLANDS WA 6009

ABM RESOURCES NL ABN 58 009 127 020 AND CONTROLLED ENTITIES

CONTENTS

The directors present their report on the consolidated entity consisting of ABM Resources NL and the entities it controlled at the end of, or during, the half-year ended 31 December 2006.

Directors

The names of persons who were directors of ABM Resources NL during the whole of the half-year and up to the date of this report are:

Mr Imants G Kins

Mr Timothy J King

Mr David Reynolds

Ms Sasya Ahmad was a director from the beginning of the half-year until her resignation on 30 November 2006.

Operating Results

The net loss of the economic entity for the half-year ended 31 December 2006 was $1,367,633, (31 December 2005: $1,168,452).

Review of Operations

The review of the operations and results of the economic entity for the half-year have been reported in detail in the quarterly reports submitted to the Australian Stock Exchange for the quarters ended 30 September 2006 and 31 December 2006.

EXPLORATION & DEVELOPMENT

Base Metals

Erayinia

Given the strong market for zinc, exploration at Erayinia has been deemed a priority activity.

The Erayinia project area is located about 150km east south east of Kalgoorlie, within an Archaean greenstone belt at the southeast margin of the Yilgarn Craton. Exploration carried out 13 to 14 vears ago identified copper-zinc mineralisation in a possible volcanic-massive-sulphide (VMS) environment. Initial drilling in the first half of 2006 had intersected massive sulphides in several drill holes targeted at Calliope $(E_1)$ , the targets for which were developed based on coincident "bullseve" magnetic and electromagnetic anomalies about 400m long.

Drilling in the second half of 2006 discovered zinc mineralisation similar to that already found at Calliope (E1) at the same shallow depths at two new targets 1-2km north of Calliope (E1) at E2 and E3. Exploration focus was on geophysical exploration, given the ground cover at Erayinia. Airborne magnetometry was flown over 28km of Erayinia which resulted in a further eight new thumbprint magnetic anomalies being discovered. Additional regional magnetometry data resulted in the identification of a further six magnetic anomaly targets. There are now 21 drill targets extending over a total strike length estimated at 40km.

The system was confirmed as a Volcanic Massive Sulphide (VMS) system with trace element analysis of mineralisation at Calliope $(E_1)$ concluding it to be similar to other VMS deposits at Golden Grove and in Canada. The source of mineralisation is likely to be hydrothermal.

Diamond drilling was undertaken for the first time with two diamond holes drilled to obtain core for analysis. Massive sulphides were intersected and a visual inspection of the core further supported that it is a VMS system. The core was sent for thin section analysis (petrography). A major exploration program has been developed for the first quarter of 2007 that includes a resource definition program at Calliope $(E_1)$ .

Africa

The exclusivity agreements on two concessions in the Democratic Republic of the Congo (DRC) were terminated following a negative due diligence report from a consultant geologist. The due diligence included a field trip to the DRC to inspect the concessions.

The Company withdrew from further negotiations on a tantalum prospect in Africa that was a carryover from the previous management.

A Memorandum of Understanding was signed with AYR Resources Africa to secure and develop gold projects in selected African countries.

Tantalum

The company completed its exit from the tantalum sector with its withdrawal from further negotiations on an African tantalum concession.

Following the completion of the metallurgical test work on material from the Brockman project, the Company initiated discussions with its joint venture partner on the future of the Joint Venture Agreement.

Uranium

Following a re-negotiation of the Joint Venture Agreement with Great Gold Mines on Erayinia the Company began a review of all data held to assess prospectivity for other minerals at Eravinia. Previously ABM Resources had only rights to base metals. The very large Gascoyne tenement holding acquired previously by the Company, formerly called Tantalum Australia, for uranium were relinguished on the basis of further field reconnaissance, assay results and overall advice from its consulting geologist. Tenements in the Gascoyne prospective for base metals were retained.

CORPORATE

Ms Sasya Ahmad, one of the non-executive directors of the Company, resigned at the AGM in November 2006. The Company wishes to thank her for her contribution over the years.

Successful capital raising with major funds and brokers was completed and the share register of the Company has seen significant changes. The single largest shareholder is now a New York based fund.

The new management at ABM Resources generated a significant increase in shareholder value with the share price rising from 5.4c at 30 June 2006 to 7.7c at 31 December 2006. This is from a low of 1.5c when the new management took over the Company in October 2005.

The Company changed its name from Tantalum Australia to ABM Resources and re-located from Balcatta to Nedlands.

ABM Resources successfully launched its new website, attracting worldwide attention.

BUSINESS DEVELOPMENT

A new tenement abutting the existing one held at Earaheedy was acquired. These tenements are base metal prospects in a positive geological setting with one already having identified geochemical anomalies.

The Joint Venture Agreement between Great Gold Mines NL and ABM Resources NL for the Erayinia project was re-negotiated. The key changes were the interest of ABM Resources going to 51% on spending $500,000 and going to 70% on spending a further $750,000 and acquiring the rights to all minerals.

A Memorandum of Understanding was signed with AYR Resources Africa to secure and develop gold projects in selected African countries.

The Company has a holding of 7.5M Accent Resources NL shares. Accent recently announced a farm-in to a vanadium titanium project in Katanning in Western Australia.

ASSET SALES

The sale of further plant and equipment as part of the exit from the tantalum sector was continued. The crusher and plant at Dalgaranga were sold to Thor Resources for a total of $725,000. The front end loader and forklift were re-located to Erayinia and an offer on the remaining jig plant is expected in the near future.

All assets at the Norseman tenement have been either sold or scrapped and a rehabilitation plan has been put into place.

Events Subsequent to Reporting Date

After balance date the sale of the spiral plant to Sunsphere Pty Ltd for a total of $ 275,000 was completed.

The scope of the next stage of exploration at Erayinia was announced to the ASX.

In March 2007 an in-principle agreement for placement of up to 30 million shares at 12.5c per share has been reached, which will lead to a gross increase in cash flow of up to $3.75 Million.

Auditor's Independence Declaration

A copy of the independence declaration by the lead auditor under section 307C is included on page 8 to this half-year financial report.

This report is made in accordance with a resolution of the Board of Directors and is signed for, and on behalf of, the directors by:

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Director .................................... , , , , , , , , , , , , , , , , , , , , Imants Kins

Dated this 16th day of March 2006

Chartered Accountants & Advisers

Level 8, 256 St George's Terrace Perth WA 6000 PO Box 7426 Cloisters Square Perth WA 6850 Tel: (61-8) 9360 4200 Fax: (61-8) 9481 2524 Email: [email protected] www.bdo.com.au

16 March 2007

The Directors ABM Resources NL Level 1, 141 Broadway NEDLANDS WA 6009

Dear Sirs

DECLARATION OF INDEPENDENCE BY BDO TO THE DIRECTORS OF ABM RESOURCES NL

To the best of my knowledge and belief, there have been:

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

Yours sincerely BDO Chartered Accountants

$\mathbb{K}$ MUz/

BG McVeigh Partner

BDO is a mational association of separate partinesskips and entities.

INTERIM FINANCIAL REPORT CONDENSED INCOME STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

The above Condensed Income Statement should be read in conjunction with the accompanying notes.

INTERIM FINANCIAL REPORT CONDENSED BALANCE SHEET FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

The above Condensed Balance Sheet should be read in conjunction with the accompanying notes.

INTERIM FINANCIAL REPORT CONDENSED CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

The above Condensed Cash Flow Statement should be read in conjunction with the accompanying notes.

INTERIM FINANCIAL REPORT CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

The above Condensed Statement of Changes in Equity should be read in conjunction with the accompanying notes.

INTERIM FINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

Note 1: Basis of Preparation of Half-Year Financial Statements

This general purpose financial report for the interim half-year reporting period ended 31 December 2006 has been prepared in accordance with Australian Accounting Standard 134 "Interim Financial Reporting" and the Corporations Act 2001.

The half-year report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

This interim report does not include all the notes of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the economic entity as the full financial report. Accordingly, this interim financial report is to be read in conjunction with the annual report for the year ended 30 June 2006 and any public announcements made by ABM Resources NL during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The same accounting policies and methods of computation have generally been followed in this interim financial report as compared with the most recent annual financial report.

Going Concern

The financial statements have been prepared on the going concern basis of accounting which assumes that the economic entity will be able to meet its commitments, realise its assets and discharge its liabilities in the ordinary course of business.

Note 2: Segment Information

The consolidated entity operated predominantly in the mineral exploration industry in Australia.

Note 3: Individually Significant Items

There were no individually significant items in the reporting period.

Note 4: Dividends

No dividends were paid or declared during the half-year.

Note 5: Contingent Liabilities

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

INTERIM FINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2006

Note 6: Events Subsequent to Balance Date

After balance date the sale of the spiral plant to Sunsphere Pty Ltd for a total of $ 275,000 was completed.

The scope of the next stage of exploration at Erayinia was announced to the ASX.

In March 2007 an in-principle agreement for placement of up to 30 million shares at 12.5c per share has been reached, which will lead to a gross increase in cash flow of up to $3.75 Million.

DIRECTORS' DECLARATION

Declaration by Directors

The directors of the company declare that:

• $11$ The financial statements, comprising the Income Statement, Balance Sheet, Cash Flow Statement, Statement of Changes in Equity and accompanying notes, are in accordance with the Corporations Act 2001 and:
  • $(a)$ comply with Accounting Standards and the Corporations Regulations 2001; and
  • give a true and fair view of the consolidated entity's financial position as at 31 $(b)$ December 2006 and of its performance for the half-year ended on that date.
• $2.$ In the directors' opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for, and on behalf of, the directors by:

fri

Director .................................... . . . . . . . . . . . . . . . . . . .

Imants Kins

Dated this 16th day of March 2006

Chartered Accountants & Advisers

Level 8, 256 St George's Terrace Perth WA 6000 PO Box 7426 Cloisters Square Perth WA 6850 Tel: (61-8) 9360 4200 Fax: (61-8) 9481 2524 Email: [email protected] www.bdo.com.au

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF ABM RESOURCES NL

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of ABM Resources NL, which comprises the condensed balance sheet as at 31 December 2006, and the condensed income statement. condensed statement of changes in equity and condensed cash flow statement for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors' declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year end or from time to time during the half-year (in order for the disclosing entity to lodge the halfyear financial report with the Australian Securities and Investments Commission).

Directors' Responsibility for the Half-Year Financial Report

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

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including; giving a true and fair view of the disclosing entity's financial position as at 31 December 2006 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 Hire Intelligence International 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.

.ISEXO is a national association of seminale vartuesslées and entities

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, provided to the directors of ABM Resources NL on 16 March 2007 would be in the same terms if provided to the directors as at the date of this auditor's review report.

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 ABM Resources NL 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 2006 $(a)$ and of its performance for the half-year ended on that date; and
• $(b)$ complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

BDO

BDO Chartered Accountants

$MU$

BG McVeigh Partner

Perth, Western Australia Dated this 16th day of March 2007