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FRASER RANGE METALS GROUP LIMITED (formerly AAQ Holdings Limited)

A.C.N. 098 236 938

Interim Report December 2012

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Fraser Range Metals Group Limited

(formerly AAQ Holdings Limited)

A.C.N. 098 236 938

Interim Report December 2012

Table of Contents

Corporate Directory...................................................................................................................... 1

Directors’ Report .......................................................................................................................... 2

Auditor’s Independence Declaration ............................................................................................. 5

Statement of Profit or Loss and Other Comprehensive Income ...................................................... 6

Statement of Financial Position .................................................................................................... 7

Statement of Changes in Equity.................................................................................................... 8

Statement of Cash Flows ............................................................................................................. 9

Notes to the Financial Statements .............................................................................................. 10

Directors' Declaration ................................................................................................................. 13

Independent Auditor’s Review Report ......................................................................................... 14

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Corporate Directory

DIRECTORS Mr Simon King (Managing Director) Mr Nicholas Poll (Non-Executive Director) Mr Daniel Smith (Non-Executive Director) COMPANY SECRETARY Mr (Nicholas) Chen Chik Ong REGISTERED OFFICE Level 8, 225 St Georges Terrace Perth WA 6000 Telephone: (08) 9486 4036 Facsimile: (08) 9486 4799 AUDITORS Bentleys Audit and Corporate (WA) Pty Ltd Level 1 12 Kings Park Road West Perth WA 6005 Telephone: (08) 9226 4500 Facsimile: (08) 9226 4300 STOCK EXCHANGE LISTING Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: FRN SOLICITORS Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street Perth WA 6000 Telephone: (08) 9321 4000 Facsimile: (08) 9321 4333 SHARE REGISTRY Computershare Level 2, 45 St Georges Terrace Perth WA 6000 Telephone: (08) 9323 2036 Facsimile: (08) 9323 2033

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Directors’ Report

Your directors submit the financial report of Fraser Range Metals Group Limited (formerly AAQ Holdings Limited) (FRN or the

Company) for the half-year ended 31 December 2012.

The names of the directors in office at any time during or since the end of the year are:-

NAME OF PERSON POSITION DATE APPOINTED DATE RESIGNED

Mr Simon King Managing Director 5 February 2013 -

Mr Nicholas Poll Non-Executive Director 5 February 2013 -

Mr Daniel Smith Non-Executive Director 5 February 2013 -

Mr Patrick Burke Non-Executive Chairman 14 March 2011 5 February 2013

Mr Keong Chan Non-Executive Director 7 October 2010 5 February 2013

Mr (Nicholas) Chen Chik Ong Non-Executive Director 1 June 2011 5 February 2013

The name of the Company Secretary in office at any time during or since the end of the year is:-

NAME OF PERSON POSITION DATE APPOINTED DATE RESIGNED

Mr (Nicholas) Chen Chik Ong Company Secretary 1 June 2011 -

Mr Eugene Lambert

Assistant Company Secretary 10 January 2012 5 February 2013

RESULTS

The operating loss after income tax for the half year amounted to $(737,178) (2011: $(390,393)).

REVIEW OF OPERATIONS

Plumridge & Fraser Range Projects Acquisition

During the reporting period, the Company announced the signing of a conditional binding term sheet (Term Sheet) to acquire two substantial tenement packages in the prospective eastern Albany-Fraser orogen in Western Australia. The Term Sheet is with ASX-listed International Goldfields Limited (IGS), to acquire 100% ownership of the Plumridge Project located along the Tropicana Gold Belt, and Fraser Range Resources Pty Ltd (FRR) to acquire 100% of the Fraser Range Project (Acquisitions). The Plumridge Project is located in the Albany-Fraser orogen on the eastern margin of the Yilgarn Craton of Western Australia and is located 260km to the east of Kalgoorlie (Figure 1). The Project comprises four granted exploration licences covering 831km

2.

The southern extent of the project is approximately 80km from a major rail link to Kalgoorlie which further connects to the Port of Esperance. Plumridge covers an extensive region of anomalous gold in calcrete and is located 90km to the southwest of the 6.4Moz Tropicana-Havana gold deposits. The Fraser Range Project is also located in the Albany-Fraser orogen and the centre of the project area is approximately 110km northeast of Esperance, covering an area of approximately 1,296km2. The project consists of four exploration licenses. The project represents a significant landholding in mostly unexplored part of the prospective Albany-Fraser orogen. It lies approximately 100km southwest along the general trend of the Albany-Fraser orogen from Sirius Resources NL’s (ASX:SIR) recently announced nickel-copper discovery at Nova. F

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Figure 1: Project Locations In November 2012, the Company has commissioned an airborne electromagnetic survey (VTEM-max survey) over the Plumridge Project for better understanding the nickel and copper prospectivity at Plumridge. The VTEM-max survey was 75% completed as at 29 January 2013. Following the VTEM-max survey, and receipt of the final data, processing and interpretation of the VTEM data will be undertaken to highlight conductive features of interest. An integrated interpretation building on all available geological data, drilling results, gravity and magnetic data, together with the VTEM data will be used to define exploration targets. Depending on the size, interpreted depth and character of the anomalies identified, follow-up work, either ground EM to refine targets or direct drill testing will be undertaken. Re-compliance with ASX Listing Rules The acquisitions constitute a change in the nature and scale of the Company’s activities in accordance with Chapter 11 of the ASX Listing Rules. The Company is required to re-comply with the admission requirements of Chapters 1 and 2 of the ASX Listing Rules including obtaining shareholder approval, preparing a prospectus and completing a capital raising. The securities of the Company are suspended following shareholder approval on 31 January 2013 to the change in nature and scale. SEAS Business There has been minimal activity for the Company’s aquaculture business during the reporting period.

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EVENTS SUBSEQUENT TO BALANCE DATE On 5 February 2013, the Company announced the retirement of directors and appointment of the existing Board members. The Company has also announced that it has entered into two unsecured, short term funding facilities with the major shareholders of Fraser Range Resources Pty Ltd for a total of $250,000 with commercial terms. Subject to shareholder approval, convertible into fully paid ordinary shares in the Company at the election of the lenders at the same price per share as those shares issued by the Company under a Prospectus as part of the re-compliance process.

On 26 February 2013, the Company announced the completion of consolidation of capital on a 33:1 basis. The Company now has 14,487,142 fully paid ordinary shares on issue.

Auditor’s Independence Declaration

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 4 for the

half-year ended 31 December 2012.

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

On behalf of the Board of Directors.

Simon King

Director

DATED this 28th day of February 2013

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To the Board of Directors

As lead audit director for the review of the financial statements of Fraser Range Metals

Group Limited for the half year ended 31 December 2012, 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

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

Yours faithfully

BENTLEYS CHRIS WATTS CA

Chartered Accountants Director

DATED at PERTH this 28th

day of February 2013

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Fraser Range Metals Group Ltd (formerly AAQ Holdings Limited) A.C.N. 098 236 938 6

Statement of Profit or Loss and Other Comprehensive Income for the half-year ended 31 December 2012

31.12.2012

$

31.12.2011

$

Revenue 8,595 25,927

Administration expense (19,637) (18,460)

Advertising and marketing (39,993) (104)

ASX expense (12,299) (13,921)

Directors fees (54,000) (58,500)

Directors consulting (21,700) -

Accounting fees (27,810) (25,679)

Company Secretarial (6,000) (12,000)

Consulting fees (42,501) (74,255)

Insurance expense (8,470) (5,406)

Legal fees (39,794) (8,270)

Management fees (41,667) (55,488)

Printing and postage (32,053) (147)

Pre-acquisition costs (333,570) -

Project Evaluation expense - (63,492)

Rent expense (21,622) (27,837)

Share Registry (8,538) (20,659)

Other expenses (36,119) (32,102)

Loss from ordinary activities before income tax expense (737,178) (390,393)

Income tax expense - -

Other Comprehensive Income - -

Items that will not be reclassified subsequently as profit or loss - -

Items that will be reclassified subsequently as profit or loss - -

Total comprehensive income attributable to members of the

Company

(737,178) (390,393)

Overall Operations

Basic loss per share (cents per share) (0.16) (0.09)

The accompanying notes form part of these financial accounts

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Statement of Financial Position as at 31 December 2012

31.12.2012

$

30.06.2012

$

CURRENT ASSETS

Cash and cash equivalents 79,720 748,215

Trade and other receivables 101,233 59,048

TOTAL CURRENT ASSETS 180,953 807,263

NON-CURRENT ASSETS

TOTAL ASSETS 180,953 807,263

CURRENT LIABILITIES

Trade and other payables 64,557 98,698

TOTAL CURRENT LIABILITIES 64,557 98,698

TOTAL LIABILITIES 64,557 98,698

NET ASSETS 116,396 708,565

EQUITY

Issued capital 28,746,689 28,601,680

Accumulated losses (28,630,293) (27,893,115)

TOTAL EQUITY 116,396 708,565

The accompanying notes form part of these financial accounts For

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Statement of Changes in Equity for the half-year ended 31 December 2012

Issued Capital

$

Accumulated

Losses

$

Total

$

Balance at 1.7.2011 28,601,680 (27,212,480) 1,389,200

Loss for the period - (390,393) (390,393)

Other comprehensive income - - -

Total comprehensive income - (390,393) (390,393)

Transactions with owners, in

their capacity as owners, and

other transfers:

Issue of share capital - - -

Less: Capital raising costs - - -

Balance at 31.12.2011 28,601,680 (27,602,873) 998,807

Balance at 1.7.2012 28,601,680 (27,893,115) 708,565

Loss for the period - (737,178) (737,178)

Other comprehensive income - - -

Total comprehensive income - (737,178) (737,178)

Transactions with owners, in

their capacity as owners, and

other transfers:

Issue of share capital 180,000 - 180,000

Less: Capital raising costs (34,991) - (34,991)

Balance at 31.12.2012 28,746,689 (28,630,293) 116,396

The accompanying notes form part of these financial accounts

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Statement of Cash Flows for the half-year ended 31 December 2012

31.12.2012

$

31.12.2011

$

CASH FLOWS FROM OPERATING ACTIVITIES

Payments to suppliers and employees (822,099) (459,275)

Interest received 8,595 25,927

Net cash used in operating activities (813,504) (433,348)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from share issue 180,000 -

Cost of share issue (34,991) -

Net cash provided by financing activities 145,009 -

Net decrease in cash held (668,495) (433,348)

Cash at beginning of period 748,215 1,341,224

Cash at end of period 79,720 907,876

The accompanying notes form part of these financial accountsFor

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Notes to the Financial Statements for the half-year ended 31 December 2012

NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

These general purpose financial statements for the interim half-year reporting period ended 31 December 2012 have been

prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB

134: Interim Financial Reporting. AASB 134 ensures compliance with International Financial Reporting Standards IAS 134 “

Interim Financial Reporting”.

This interim financial report is intended to provide users with an update on the latest annual financial statements of Fraser

Range Metals Group (formerly known as AAQ Holdings Limited) (the "Company"). As such, it does not contain information that

represents relatively insignificant changes occurring during the half-year within the company. It is therefore recommended that

this financial report be read in conjunction with the annual financial statements of the company for the year ended 30 June

2012, together with any public announcements made during the half-year.

The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 30 June 2012.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to their operations and effective for the current half year. New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Group include:

Amendments to AASB 1, 5, 7, 101, 112, 120, 121, 132, 133 and 134 as a consequence of AASB 2011-9 ‘Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income’

The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Company’s accounting policies and has no effect on the amounts reported for the current or prior half-years. However, the application of AASB 2011-9 has resulted in changes to the Company’s presentation of, or disclosure in, its half-year financial statements.

Under the amendments to AASB 101, the statement of comprehensive income is renamed as a statement of profit or loss and

other comprehensive income. The amendments also require items of other comprehensive income to be grouped into two

categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and

(b) items that may be reclassified subsequently to profit or loss when specific conditions are met. The amendments have been

applied retrospectively and the application of the amendments to AASB 101 do not result in any impact on profit or loss, other

comprehensive income and total comprehensive income

The accounting policies have been applied consistently throughout the Company for the purposes of preparation of these

interim financial statements.

Going concern

The half-year financial report has been prepared on a going concern basis, which assumes continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

For the half year ended 31 December 2012, the company incurred a net loss of $737,178 (2011: $390,393) and had net cash outflows of $668,495 (2011: $433,348)

During the reporting period, the Company announced the signing of a conditional binding term sheet (“Term Sheet”) to acquire two substantial tenement packages in the prospective eastern Albany-Fraser orogen in Western Australia. The Term Sheet is with ASX-listed International Goldfields Limited (IGS), to acquire 100% ownership of the Plumridge Project located along the Tropicana Gold Belt, and Fraser Range Resources Pty Ltd (FRR) to acquire 100% of the Fraser Range Project (Acquisitions). In addition to various other conditions precedent, the Company must raise a minimum of $2,000,000 in capital or such greater amount as required by the ASX for the company to re-list on the ASX following completion of the agreement. On 31 January 2013 the shareholders approved the acquisitions as well as approval for the Company to issue up to 25,000,000 shares (post consolidation) at an issue price of $0.20 per share to raise a total of $5,000,000.

The ability of the entity to continue as a going concern is principally dependent upon the ability of the company to raise the funds as mentioned above and additional funds as required to meet ongoing working capital requirements. These conditions indicate a material uncertainty that may cast significant doubt about the ability of the Company to continue as a going concern.

During the period the Company raised $180,000 before costs through the issue of equity. The directors are satisfied that the going concern basis of preparation is appropriate, in particular given the company’s history of being able to raise capital as and when required.

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NOTE 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Should the Company be unable to continue as a going concern it may be required to realise its assets and extinguish its

liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The

financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or

to the amount and classification of liabilities that might result should the company be unable to continue as a going concern and

meet its debts as and when they fall due.

NOTE 2. ISSUED CAPITAL 31.12.2012

$

30.06.2012

$

478,031,482 (2011: 418,031,482) Fully paid ordinary shares with no par value 28,746,689 28,601,680

(a) Ordinary shares: No. No.

At the beginning of the reporting period 418,031,492 418,031,492

Shares issued during the year

– Issue of shares 60,000,000 -

At reporting date 478,031,492 418,031,492

NOTE 3. RELATED PARTIES

31.12.2012

$

31.12.2011

$

During the period the following related party transaction took place with director

related entities:

Charterhouse Capital Pty Ltd - 36,793

RM Corporate Pty Ltd - 4,528

- 41,321

NOTE 4. EVENTS SUBSEQUENT TO REPORTING DATE

On 5 February 2013, the Company announced the retirement of directors and appointment of the existing Board members. The Company has also announced that it has entered into two unsecured, short term funding facilities with the major shareholders of Fraser Range Resources Pty Ltd for a total of $250,000 with commercial terms. Subject to shareholder approval, convertible into fully paid ordinary shares in the Company at the election of the lenders at the same price per share as those shares issued by the Company under a Prospectus as part of the re-compliance process.

On 26 February 2013, the Company announced the completion of consolidation of capital on a 33:1 basis. The Company now has 14,487,142 fully paid ordinary shares on issue.

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NOTE 5. SEGMENT REPORTING

The Company has identified one reportable segment 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.

The board reviews financial information on the same basis as presented in the financial statements and has therefore

determined the operating segment on this basis.

NOTE 6. CONTINGENT ASSETS AND LIABILITIES

To the best of the knowledge of the current directors there are no other contingent liabilities or assets as at 31 December 2012

During the reporting period, the Company announced the signing of a conditional binding term sheet (“Term Sheet”) to acquire two substantial tenement packages in the prospective eastern Albany-Fraser orogen in Western Australia. The Term Sheet is with ASX-listed International Goldfields Limited (IGS), to acquire 100% ownership of the Plumridge Project located along the Tropicana Gold Belt, and Fraser Range Resources Pty Ltd (FRR) to acquire 100% of the Fraser Range Project (Acquisitions).

The acquisitions are conditional upon the following conditions being met:

a) The approval and issue of 1.2 billion shares (on a preconsolidation basis)

b) The approval and issue of shares to advisors

c) The approval and issue of shares as part of the capital raising (a minimum of $2 million) and any share purchase plans

d) Approval of the company to adopt a performance based share plan available to all executive directors and employees of the Company

e) Approval by the ASX to undergo change in nature and scale.

f) Approval under s 254H of the Corporations Act 2001 for a share consolidation of 33:1.

g) IGS to obtain all necessary shareholder approval to complete the transaction.

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Directors' Declaration The Directors of the Company are declare that:

1. The financial statements and notes, as set out on pages 6 to 11, are in accordance with the Corporations Act 2001,

including:

(a) complying with Accounting Standard AASB 134: Interim Financial Reporting; and

(b) giving a true and fair view of the Company’s financial position as at 31 December 2012 and of the 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.

Simon King

Director

DATED this 28th day of February 2013

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We have reviewed the accompanying half-year financial report of Fraser Range Metals

Group Limited (“the Company”) which comprises the statement of financial position as at

31 December 2012, the statement of profit or loss and other comprehensive income,

statement of changes in equity and statement of cash flows for the half-year ended on

that date, a statement of accounting policies, other selected explanatory notes and the

directors’ declaration.

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 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.

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 financial report is

not in accordance with the Corporations Act 2001 including: giving a true and fair view of

the Company’s financial position as at 31 December 2012 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 Fraser

Range Metals Group 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.

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

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 Fraser Range Metals Group Limited is not in accordance with the

Corporations Act 2001 including:

a. 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

b. Complying with Accounting Standard AASB 134: Interim Financial Reporting and Corporations

Regulations 2001.

Without qualifying our conclusion, we draw attention to Note 1 in the half-year financial report which indicates

that the Company incurred a loss for the period ending 31 December 2012 of $737,178. This condition, along

with other matters as set forth in Note 1, indicate the existence of a material uncertainty which may cast

significant doubt about the ability of the Company to continue as a going concern and whether it will realise its

assets and extinguish its liabilities in the normal course of business and at the amounts stated in the half-year

financial report.

BENTLEYS CHRIS WATTS CA

Chartered Accountants Director

DATED at PERTH this 28th

day of February 2013

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For personal use only · Bentleys Audit and Corporate (WA) Pty Ltd Level 1 12 Kings Park Road ......

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