Forte Energy NL
LSE : FTE

March 16, 2011 03:54 ET

Half year accounts

                                                       1




                                                                                                               
                                                FORTE ENERGY NL
                                                       
                                                       
                                                       
                                                       
                                              ABN 59 009 087 852
                                                       
                                                       
                                                       
                                                       
                                                       
                                                       
                                          HALF-YEAR FINANCIAL REPORT
                                                       
                                                       
                                               31 DECEMBER 2010
                                                       
                                                       
                                                       
                                                       
                                                Forte Energy NL
                                               36 Outram Street
                                              West Perth WA 6005
                                                   AUSTRALIA
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                                       
                                                       
                                                   CONTENTS







        Directors' Report                                                                                2

        Consolidated Statement of Financial Position                                                     4

        Consolidated Statement of Comprehensive Income                                                   5

        Consolidated Statement of Changes in Equity                                                      6

        Consolidated Statement of Cash Flow                                                              7

        Notes to the Half-Year Financial Report                                                          8

        Directors' Declaration                                                                          17

        Auditor's Independence Declaration                                                              18

        Independent Review Report                                                                       19





                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                               DIRECTORS' REPORT
                                                       

The  Board of Directors of Forte Energy NL present their half-year report on the Consolidated Entity consisting
of  Forte Energy NL ("the Company" or "Forte Energy") and the entities it controlled at the end of, or  during,
the half-year ended 31 December 2010 ("Consolidated Entity" or "Group").

Directors

The  names of the Company's Directors in office during the half-year and until the date of this report  are  as
below.  Directors were in office for this entire period unless otherwise stated.

Glenn Robert Featherby - Chairman
Lady Barbara Judge- Deputy Chairman
Mark David Reilly - Managing Director
Christopher David Grannell - Non-executive Director
Bosse Gustafsson - Technical Director

Review and Results of Operations

The Consolidated Entity reported a loss for the half-year of $1,150,674 (2009: $1,706,475).

The  principal activity of the Consolidated Entity during the reporting period was the exploration for  mineral
resources.

The  Company  continues  to investigate resource opportunities. Currently these are focused  on  the  Company's
uranium exploration licences in West Africa in the Republic of Guinea and the Islamic Republic of Mauritania.

Uranium Exploration - Guinea

    *       The Company's exploration permits at Firawa and Bohoduo were renewed during the reporting period. Also
        the political situation appears to have improved in Guinea following the country's first democratic elections
        since gaining independence more than 50 years ago.

    *        Metallurgical  studies focussing on optimisation of heap leach recoveries from the Firawa  uranium
        project continued during the first part of this reporting period with a view to commencing pre-feasibility
        studies.

    *       These studies were put on hold following the discovery of Rare Earth Elements (REE) at 1.3% in one of
        the drill samples from Firawa. Follow-up testing of five more random samples returned average REE grades of
        more than 2.5% and indicated the REE was likely to be widespread throughout the uranium deposit.

    *       Based on the above it was decided to re-test all 7,000 samples stored on site from previous drilling
        at Firawa. This process is currently underway with the aim of determining an initial JORC code compliant REE
        mineral resource for Firawa by the end of this financial year.

    *       Following the 2010 wet season, the Company engaged contractors to undertake rehabilitation works on
        roads and bridges and clearing of local access tracks to improve access for heavy vehicles transporting
        drilling equipment to site. When this work is completed, an initial phase of RC drilling will commence, to be
        followed by an extensive programme of infill and extension diamond drilling. Results from these programmes are
        expected to enable a revised JORC compliant resource to be calculated for the Firawa deposit, which currently
        has an initial JORC compliant Inferred Resource of 17.7Mt at 296ppm for 11.6Mlbs U3O8 (100ppm cut-off), and
        remains open in all directions.
                                                       
    *        Forte Energy has appointed UK based mineral engineering consultants, GBM Engineering, to lead  the
        metallurgical testing and process design project for the Firawa Uranium Project. The presence of REEs requires
        a more comprehensive testing regime aimed at developing a full Uranium/ REE process design.

    *        The Company has also engaged global engineering firm SGS who have commenced work on the associated
        environmental and anthropological surveys in the region of the Firawa deposit as part of the pre-feasibility
        studies.

Uranium Exploration - Mauritania

    *        Maiden JORC resource estimate completed in July 2010 for Bir En Nar Uranium Project in Mauritania,
        with an Indicated and Inferred Resource of 1.33Mt @ 704ppm U3O8 for 2.06Mlbs of contained U3O8 (100ppm cut-
        off).

    *       Completion of extended 7,000m Reverse Circulation ("RC") component of resource drilling programme at
        A238 uranium prospect

    *       Assay results received so far from over half of 120 RC holes with best intercepts including:
            o       44m @ 555ppm U
            o       52m @ 434ppm U
            o       55m @ 476ppm U
            o       80m @ 369ppm U

    *       1,500m diamond core drilling programme at A238 nearing completion, with estimation of a preliminary
        maiden JORC resource for A238 expected in H1 2011, while additional follow-up drilling is to be undertaken
        before the end of the current field season.

    *       Several new prospects with high grade uranium at surface identified for drill testing later this field
        season, with drilling currently underway at A29 prospect, located approximately 20km to the south of A238.

Corporate

    *        In August 2010 Forte Energy announced the appointment of Brad George as Chief Operating Officer to
        expedite the Company's exploration programmes in West Africa.

Events subsequent to balance date

On  18 January 2011, the Company announced a placement of 120,000,000 ordinary shares at 12.5cents per share to
raise  $15  million  before costs, with the placement to be conducted in two tranches.  A  general  meeting  of
shareholders held on 8 March 2011 ratified the issue of shares for the first tranche of 87,098,704  shares  for
an amount of $10,887,338 and authorised the issue of shares for the second tranche.

Apart from other events to the extent to which are described elsewhere in this Director's Report, there has not
arisen  in  the  interval between the end of the financial period and the date of this report any  other  item,
transaction or event of a material or unusual nature likely, in the opinion of the Directors of the Company, to
effect:

    i.      the Consolidated Entity's operations in future financial years; or
    ii.     the results of those operations in future financial years; or
    iii.    the Consolidated Entity's state of affairs in future financial years.

Dividends

No dividend has been paid during the period (2009:  $ nil).

AUDITOR'S INDEPENDENCE DECLARATION

A  copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act is set
out on page 18 and forms part of this report.

Signed in accordance with a resolution of the directors.






Mark Reilly
Managing Director

London 16 March 2011



Note:

The  information  in this report that relates to Exploration Results is based on information  compiled  by  Mr.
Bosse Gustafsson, who is a Member of the European Federation of Geologists, a 'Recognised Overseas Professional
Organisation'  ('ROPO') included in a list promulgated by the ASX from time to time. Mr Gustafsson  is  a  full
time  Technical  Director of Forte Energy NL and is responsible for exploration activities  in  Mauritania  and
Guinea.  Mr. Gustafsson 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'.

The  information  in  this report that relates to the Mineral Resource at Bir En Nar is  based  on  information
compiled  by  Mr. Bosse Gustafsson who is employed by Forte Energy NL and Mr. Neil Inwood who  is  employed  by
Coffey Mining Ltd.  Mr. Gustafsson and Mr. Inwood have sufficient experience which is relevant to the style  of
mineralisation  and  type  of deposit under consideration and to the activity which they  have  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".

The information in this report that relates to the Mineral Resource at Firawa in Guinea is based on information
compiled  by  Mr. Bosse Gustafsson of Forte Energy NL and Mr. Doug Corley of Coffey Mining Ltd. Mr.  Gustafsson
and  Mr. Corley have sufficient experience which is relevant to the style of mineralisation and type of deposit
under  consideration and to the activity which they have undertaken to qualify as a Competent Person as defined
in  the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and  Ore
Reserves".

Mr. Gustafsson, Mr. Inwood and Mr. Corley consent to the inclusion in this report of the matters based on their
information in the form and context in which it appears.



                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                            AS AT 31 DECEMBER 2010
                                                       


                                                    Notes      31 December 2010            30 June 2010
                                                                       $                        $
 ASSETS                                                                                                  
 Current Assets                                                                                          
 Cash and cash equivalents                            6                 1,056,755               4,091,528
 Trade and other receivables                                              180,497                 234,867
 Prepayments                                                              140,181                 129,175
                                                                        1,377,433               4,455,570
 Non-current assets classified as held for sale       7                   112,801                  50,795
 Total Current Assets                                                   1,490,234               4,506,365
                                                                                                         
 Non-current assets                                                                                      
 Available-for-sale financial assets                                       14,672                  13,938
 Exploration and evaluation expenditure               9                18,645,445              16,388,381
 Plant and equipment                                                      110,770                 131,851
 Total Non-Current Assets                                              18,770,887              16,534,170
                                                                                                         
 TOTAL ASSETS                                                          20,261,121              21,040,535
                                                                                                         
 LIABILITIES                                                                                             
 Current Liabilities                                                                                     
 Trade and other payables                                               1,005,173                 849,349
 Income tax payable                                                        18,868                  11,088
 Provisions                                                                68,524                  46,536
                                                                        1,092,565                 906,973
 Liabilities associated with assets held for sale     7                    50,231                       -
 Total Current Liabilities                                              1,142,796                 906,973
                                                                                                         
 TOTAL LIABILITIES                                                      1,142,796                 906,973
                                                                                                         
 NET ASSETS                                                            19,118,325              20,133,562
                                                                                                         
 EQUITY                                                                                                  
 Contributed equity                                   11               67,595,024              67,486,567
 Reserves                                                               2,319,197               2,292,217
 Accumulated losses                                                  (50,795,896)            (49,645,222)
                                                                                                         
 TOTAL EQUITY                                                          19,118,325              20,133,562
 
                                                      
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                                       
                                CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                   FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
                                                       
                                                       
                                                            Notes          2010                  2009
                                                                            $                     $
                                                                                                          
                                                                                                          
 Revenue                                                       4              94,725               163,384
 Administrative expenses                                       5         (1,235,290)           (1,869,859)
                                                                                                          
 Loss before income tax                                                  (1,140,565)           (1,706,475)
 Income tax expense                                                         (10,109)                     -
                                                                                                          
 Loss after income tax                                                   (1,150,674)           (1,706,475)
                                                                                                          
                                                                                                          
 Net loss for the period                                                 (1,150,674)           (1,706,475)
                                                                                                          
 Other comprehensive income/(expense)
 Gain/(loss) on available-for-sale financial assets, net                         734               (8,412)
 of tax
 Foreign currency translation                                               (10,011)               (5,024)
 Other comprehensive income/(expense) for the period net                     (9,277)              (13,436)
 of tax
                                                                         (1,159,951)           (1,719,911)
 TOTAL COMPREHENSIVE INCOME/(EXPENSE) FOR THE PERIOD
 ATTRIBUTABLE TO MEMBERS OF FORTE ENERGY NL
                                                                                                          
                                                                                                          
 Loss per share for loss attributable to the ordinary
 equity holders of the Company (cents per share)
 - basic loss per share                                                       (0.20)                (0.31)
 - diluted loss per share                                                     (0.20)                (0.31)
                                                                                                          
 
                                               FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                   FOR THE HALF -YEAR ENDED 31 DECEMBER 2010
                                                       
                
                            Contributed    Accumulated    AFS financial     Equity        Foreign        Total
                               equity        losses          assets        benefits      currency       equity
                                                             reserve        reserve     translation        
                                 $              $               $              $             $             $
                                                                                                           
 At 1 July 2010               67,486,567   (49,645,222)          (9,542)    2,303,522       (1,763)     20,133,562
                                                                                                                  
 Changes in equity for
 the half year to 31
 December 2010
 Total comprehensive                   -    (1,150,674)              734            -      (10,011)    (1,159,951)
 income/(expense) for the
 half year net of tax
                                                                                                                  
 Equity transactions:
 Share-based payment                   -              -                -       36,257             -         36,257
 Exercise of options             110,000              -                -            -             -        110,000
 Transaction costs               (1,543)              -                -            -             -        (1,543)
 Balance At                   67,595,024   (50,795,896)          (8,808)    2,339,779      (11,774)     19,118,325
 31 December 2010
                                                                                                           
 
 At 1 July 2009               61,741,570   (47,307,110)              817    1,811,923             -     16,247,200
                                                                                                                  
 Changes in equity for
 the half year to 31
 December 2009
 Total comprehensive                   -    (1,706,475)          (8,412)            -       (5,024)    (1,719,911)
 income/(expense) for the
 half year net of tax
                                                                                                                  
 Equity transactions:
 Share-based payment                   -              -                -      514,754             -        514,754
 Exercise of options             441,500              -                -            -             -        441,500
 Issue of ordinary shares      5,331,000              -                -            -             -      5,331,000
 Transaction costs             (566,047)              -                -            -             -      (566,047)
 Balance At                   66,948,023   (49,013,585)          (7,595)    2,326,677       (5,024)     20,248,496
 31 December 2009
                                                       
  
                                              FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                      CONSOLIDATED STATEMENT OF CASH FLOW
                                   FOR THE HALF -YEAR ENDED 31 DECEMBER 2010

                                                                           2010                  2009
                                                                            $                     $
                                                                                                           
Cash flows from operating activities

Payments to suppliers and employees                                        (1,138,870)           (1,423,446)
Interest and other income received                                            142,007               137,701
                                                                                                            
Net cash flows used in operating activities                                  (996,863)           (1,285,745)
                                                                                                           
Cash flows from investing activities                                                                       

Proceeds from sale of equipment                                                     -                     -
Payment for purchase of equipment                                              (7,223)              (63,785)
Payment for exploration and evaluation expenditure                         (2,134,898)           (3,658,960)
                                                                                                            
Net cash flows used in investing activities                                (2,142,121)           (3,722,745)
                                                                                                           
Cash flows from financing activities                                                                       

Proceeds from issue of shares                                                 110,000             5,632,500
Refund of share oversubscriptions                                                   -             (188,900)
Transaction costs relating to issue of shares                                 (1,542)           (1,044,808)
                                                                                                           
Net cash flows from financing activities                                      108,458             4,398,792
                                                                                                           
Net increase/(decrease) in cash and cash equivalents                      (3,030,526)             (609,698)
Effects of exchange rate changes on cash and cash equivalents                 (4,247)              (74,150)
Cash and cash equivalents at beginning of the period                        4,091,528             6,628,394
                                                                                                           
Cash and cash equivalents at end of period                                  1,056,755             5,944,546

                                                       
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                         NOTES TO THE FINANCIAL REPORT
                                   FOR THE HALF-YEAR ENDED 31 DECEMBER 2010

1.    CORPORATE INFORMATION

      The  half-year  report of Forte Energy NL ("Consolidated Entity") for the period ended 31  December  2010
      was authorised for issue in accordance with a resolution of the directors on 16 March 2011.

      Forte  Energy  NL  is  a company limited by shares incorporated in Australia, whose shares  are  publicly
      traded  on  the  Australian Stock Exchange (ASX code "FTE"), and on the AIM Board  of  the  London  Stock
      Exchange.

      The  nature  of  operations and principal activities of the Consolidated Entity during the half-year  was
      the  exploration  for minerals. There have been no significant changes in the nature of these  activities
      during the half-year.

2.    BASIS OF PREPARATION AND ACCOUNTING POLICIES

(a)   Basis of Preparation

         This general purpose condensed consolidated financial report for the half-year ended 31 December  2010
      has  been  prepared  in accordance with AASB 134 "Interim Financial Reporting" and the  Corporations  Act
      2001.

      The  half-year  financial  report does not include all notes of the type  normally  included  within  the
      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  Consolidated
      Entity as the full financial report.
      
      It  is  recommended  that the half-year financial report should be read in conjunction  with  the  annual
      financial  report  of Forte Energy NL for the year ended 30 June 2010 and considered  together  with  any
      public  announcements made by Forte Energy NL during the half-year ended 31 December 2010  in  accordance
      with the continuous disclosure obligations of the ASX Listing Rules.
      
         The half-year financial report has been prepared on a historical cost basis, except for available-for-
      sale investments, which have been measured at fair value.

        The financial report is presented in Australian dollars ($).

         For  the  purpose  of preparing the half-year financial report, the half-year has been  treated  as  a
      discrete reporting period.



 (b)  Significant accounting policies

        The half-year consolidated financial statements have been prepared using the same accounting policies as
      used  in  the  annual financial statements for the year ended 30 June 2010, except for  the  adoption  of
      amending accounting standards and interpretations effective for annual reporting periods beginning on  or
      after 1 July 2010.

         From  1  July 2010, the Group has adopted all the Standards and Interpretations, mandatory for  annual
      periods beginning on or after 1 July 2010, including:

      *        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 unrecognized assets in the  statement  of  cash  flows  and  the
          classification of leases of land and buildings.
          
         Adoption  of these standards and interpretations did not have any effect on the financial position  or
      performance of the Group.

         The  Group has not elected to early adopt any new standards or amendments that are issued but not  yet
      effective.

(c)   Basis of consolidation

      The  consolidated  financial statements comprise the financial statements of  Forte  Energy  NL  and  the
      entities it controlled at the end of, or during, the half year ended 31 December 2010 ('the Group').

      The  financial  statements of the subsidiaries are prepared for the same reporting period as  the  parent
      company, using consistent accounting policies.

      In  preparing  the consolidated financial statements, all intercompany balances and transactions,  income
      and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

      Subsidiaries are fully consolidated from the date on which control is transferred to the Group and  cease
      to be consolidated from the date on which control is transferred out of the Group.


3.      SEGMENT INFORMATION

        Identification of reportable segments:
        
        For  management  purposes,  the Consolidated Entity is organised into two business  segments  based  on
        geographical exploration regions.
        
        Management  monitors the operating results of business segments separately for the  purpose  of  making
        decisions  about  resources  to  be  allocated and of assessing  performance.  Segment  performance  is
        evaluated  based  on exploration costs and results obtained. Finance costs, finance income  and  income
        taxes are managed on a group basis.
        
        The reportable segments of the Consolidated Entity are as follows:
        
               o       Uranium exploration in Mauritania.
               o       Uranium exploration in Guinea.

        Accounting policies and inter-segment transactions:

        The  accounting  policies used by the Group in reporting segments are consistent  with  those  used  to
        prepare the half-year financial report and are the same as those used in the prior year.
        
        It  is  the  Consolidated Entity's policy that if items of revenue and expenses are  not  allocated  to
        operating segments then any associated assets and liabilities are also not allocated to segments.  This
        is to avoid asymmetrical allocations within segments which management believe would be inconsistent.
        
        The  following items and associated assets and liabilities are not allocated to operating  segments  as
        they are not considered part of the core operations of any segment:
               o       Interest income and cash balances
               o       Net gains and losses on disposal of available-for-sale investments
               o       Non-current assets classified as held for sale, and
               o       Corporate and administrative income and expenses other than the depreciation of fixed assets.

        
        Operating segments - 31 December 2010

                                                           Mauritania       Guinea uranium         Total
                                                             uranium         exploration              
                                                           exploration            $                   
                                                                $                                    $
         Half year ended 31 December 2010                                                             
                                                                                                      
         Revenues                                                                                     
         Other Revenue from external customers                         -                  -                   -
         Total Segment revenue                                         -                  -                   -
         Unallocated items                                                                                     
         Interest Income                                                                                 60,115
         Other unallocated revenue                                                                       34,610
         Total revenue per statement of comprehensive                                                    94,725
         income
                                                                                                               
                                                       
         Results                                                                                               
         Segment results                                         (8,350)           (13,812)            (22,162)
         Unallocated items                                                                                     
         Unallocated revenue                                                                             94,725
         Administrative expenses                                                                    (1,223,237)
         Net loss before tax                                                                        (1,150,674)
                                                                                                               
                                                                                                               
         Segment assets                                       13,254,497          5,470,031          18,724,528
         Cash and cash equivalents                                                                    1,056,755
         Non-current  assets classified  as  held  for                                                  112,801
         sale
         Other Corporate assets                                                                         367,037
         Total   assets  per  statement  of  financial                                               20,261,121
         position
                                                                                                               
         Segment liabilities                                   (948,401)           (18,762)           (967,163)
         Unallocated liabilities                                                                      (175,633)
         Total liabilities                                                                          (1,142,796)

        Operating segments - 31 December 2009

                                                           Mauritania       Guinea uranium         Total
                                                             uranium         exploration              
                                                           exploration            $                   
                                                                $                                    $
         Half year ended 31 December 2009                                                             
                                                                                                      
         Revenues                                                                                     
         Other Revenue from external customers                         -                  -                   -
         Total Segment revenue                                         -                  -                   -
         Unallocated items                                                                                     
         Interest Income                                                                                124,718
         Other unallocated revenue                                                                       38,666
         Total revenue per statement of comprehensive                                                   163,384
         income
                                                                                                               
         Results                                                                                               
         Segment results                                         (6,381)           (11,844)            (18,225)
         Unallocated items                                                                                     
         Unallocated revenue                                                                            163,384
         Administrative expenses                                                                    (1,851,634)
         Net loss before tax                                                                        (1,706,475)
                                                                                                               
                                                                                                               
         Segment assets as at 30 June 2010                    11,249,761          5,239,866          16,489,627
         Cash and cash equivalents                                                                    4,091,528
         Non-current  assets classified  as  held  for                                                   50,795
         sale
         Other Corporate assets                                                                         408,585
         Total   assets  per  statement  of  financial                                               21,040,535
         position as at 30 June 2010
                                                                                                               
         Segment liabilities as at 30 June 2010                (673,672)           (78,425)           (752,097)
         Unallocated liabilities                                                                      (154,876)
         Total liabilities as at 30 June 2010                                                         (906,973)



4       REVENUE
        
                                                                               2010                 2009
                                                                                $                    $
                                                                                                            
         Interest income                                                         60,115              124,718
         Office sub-lease rent                                                   34,610               18,666
         Other income                                                                 -               20,000
         Total other revenue                                                     94,725              163,384
                                                                                                             
                                                                                                             

5       ADMINISTRATION EXPENSES

                                                                               2010                 2009
                                                                                $                    $
                                                                                                            
Accounting and audit fees                                                        28,780               22,690
Consulting fees                                                                  45,240              144,608
Depreciation of plant and equipment                                              28,696               22,901
Employee benefits expense (i)                                                   482,515            1,087,210
Other employment expenses                                                         2,645                    -
Exploration expense                                                               1,455                    -
Foreign exchange differences                                                     25,524               74,150
Legal fees                                                                       15,452               45,613
Media and public relations                                                       52,723               72,052
Nominated adviser and broker fees                                                51,483               57,228
Promotions, roadshows and conferences                                            22,419               50,855
Reporting and listing costs                                                      55,294               84,227
Telecommunication and computing                                                  66,079               49,794
Travel and accommodation                                                        145,404               60,534
Minimum lease payments - operating lease                                        142,593               56,476
Other                                                                            68,988               41,521
Total administrative expenses                                                 1,235,290            1,869,859
                                                                                               

(i)     Employee benefits expense is comprised of:

Salaries and wages                                                              336,532              485,235
Employee provisions                                                              23,447               13,211
Share based payments                                                             36,257              514,753
Other staff costs                                                                86,279               74,011
Total                                                                           482,515            1,087,210
        

                                                       

6.      CASH AND CASH EQUIVALENTS


                                                                  31 December 2010           30 June 2010
                                                                             $                    $
                                                                                                           
Cash at bank and in hand                                                    1,056,755             4,091,528

        Cash at bank earns interest at floating rates based on daily bank deposit rates. The carrying amounts
        of cash and cash equivalents represent fair value.


7.      NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

        In line with the Company's focus on progressing its uranium exploration projects, the Company has entered
        into sale agreements to realise value for its non-uranium assets and has therefore recognised these
        exploration assets as assets held for sale.

        The assets and liabilities associated with the non-uranium assets are as follows:

         Capitalised exploration and evaluation expenditure                      112,801              50,795       
         Liabilities                                                            (50,231)                   -                        
                                                                                  62,570              50,795           

8.      DIVIDENDS

        There were no dividends proposed or paid during the half-year ended 31 December 2010 (2009: nil).


9.      EXPLORATION AND EVALUATION EXPENDITURE

        Movements in carrying amounts

                                                                        31 December 2010           30 June
                                                                                   $                 2010
                                                                                                      $
                                                                                                               
         Carrying amount at 1 July                                            16,388,381             9,564,296
         Additions                                                             2,319,070             6,824,085
         Reclassification to non-current assets held for sale                   (62,006)                     -
         Carrying amount at end of period net of impairment                   18,645,445            16,388,381


        
        Exploration  and  evaluation  costs have been capitalised at cost. No impairment  loss  was  recognised
        during the half-year ended 31 December 2010 (2009: nil ) because either:
          *       The exploration and evaluation activities are expected to be recouped through successful development
                  and exploitation of the area of interest or, alternatively, by its sale; or
          *       Exploration and evaluation activities in each area of interest have not at the reporting date reached
a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves, and active and significant operations in, or relevant to, the area of interest are continuing.


10.     COMMITMENTS AND CONTINGENCIES

        There  have been no material changes to the commitments and contingencies disclosed in the most  recent
        annual financial report.


11.   CONTRIBUTED EQUITY

                                                                    31 December 2010           30 June 2010
                                                                              $                     $
         Ordinary shares                                                                                     
         582,658,031 (30 June 2010: 580,658,031)                                                            
         ordinary shares, fully paid                                         67,572,524           67,464,067
                                                                                             
         2,250,000 (30 June 2010: 2,250,000) 25 cent                                                        
         value ordinary shares, partly paid to 1 cent                            22,500               22,500
                                                                             67,595,024           67,486,567

         (i)          Ordinary shares                                                                        
         
               Movement in ordinary shares on issue                         Number                  $
                                                                                                             
                 At 1 July 2009                                             511,348,031            61,719,070
                 Share issues                                                53,310,000             5,331,000
                 Share issues for other assets                                6,500,000               441,500
        Transaction costs                                                             -             (566,047)
                                                                                                             
                  Balance at 31 December 2009                               571,158,031            66,925,523
                                                                                                     
                                                                            580,658,031            67,486,567
                 At 1 July 2010
                 Share issues from exercise of options                        2,000,000               110,000
        Transaction costs                                                             -               (1,543)
                                                                                                             
         Balance at 31 December 2010                                        582,658,031            67,595,024


                                                       

11.   CONTRIBUTED EQUITY (Continued)

        
        (ii)    Options
        
                 Options over ordinary shares:
                 
                 During the financial period:
                     *       2,000,000 ordinary shares were issued following the exercise of director's options at 5.5 cents each
                     *       1,000,000 options were granted fully vested with an exercise price of 6 pence
                     *       2,000,000 options were granted with an exercise price of 10 pence vesting in one year    subject to continuing employment.


12.     EVENTS AFTER THE BALANCE SHEET DATE
   
        On  18 January 2011, the Company announced a placement of 120,000,000 ordinary shares at 12.5cents  per
        share  to raise $15 million before costs, with the placement to be conducted in two tranches. A general
        meeting  of  shareholders held on 8 March 2011 ratified the issue of shares for the  first  tranche  of
        87,098,704  shares  for  an amount of $10,887,338 and authorised the issue of  shares  for  the  second
        tranche. There have been no other significant events that have occurred after Balance Sheet date.


        
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                            DIRECTORS' DECLARATION
                                                       

In accordance with a resolution of the Directors of Forte Energy NL, I state that:

In the opinion of the Directors:

(a)     the financial statements and notes of the Consolidated Entity are in accordance with the Corporations
        Act 2001, including:

        (i)     giving a true and fair view of the financial position as at 31 December 2010 and the
                 performance for the half-year ended on that date of the Consolidated Entity; and
        
        (ii)    complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations
                 Regulations 2001; and

(b)     there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as
        and when they become due and payable.

On behalf of the Board






Mark D Reilly
Managing Director



London 16 March 2011




ERNST & YOUNG                            The Ernst & Young Building             Tel       61 8 9429 2222
                                                        11Mounts Bay Road       Fax       61 8 9429 2436
                                                        Perth WA 6000
                                                        Australia

                                                        GPO Box M939
                                                        Perth  WA  6843
                                                        www.ey.com/au








Auditor's Independence Declaration to the Directors of Forte Energy NL


In relation to our review of the financial report of Forte Energy NL for the half-year ended 31 December 2010,
to the best of my knowledge and belief, there have been no contraventions of the auditor independence
requirements of the Corporations Act 2001 or any applicable code of professional conduct.



Ernst & Young



T S Hammond
Partner
Perth
16 March 2011







TH:VP:FORTE:025                                                               Liability limited by a scheme approved
                                                                           under Professional Standards
                                                                           Legislation


ERNST & YOUNG                            The Ernst & Young Building             Tel       61 8 9429 2222
                                                        11Mounts Bay Road       Fax       61 8 9429 2436
                                                        Perth WA 6000
                                                        Australia

                                                        GPO Box M939
                                                        Perth  WA  6843
                                                        www.ey.com/au







        To the members of Forte Energy NL

Report on the half-year financial report
        We have reviewed the accompanying half-year financial report of Forte Energy NL, which comprises the
statement of financial position as at 31 December 2010, the statement of comprehensive income, statement of
changes in equity and statement of cash flow for the half-year ended on that date, notes comprising a summary
of significant accounting policies and other explanatory information, and the directors' declaration of the
consolidated entity comprising the company and the entities it controlled at the half-year end or from time to
time during the half-year.

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 controls as the directors determine are 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 Interim
and Other Financial Reports 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 consolidated entity'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 Forte Energy NL and the entities it controlled during the half-year, 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 have given to the directors of the company a written Auditor's Independence Declaration, a copy of
which is included in the Directors' 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 Forte Energy NL 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.
          


Ernst & Young


T S Hammond
Partner
Perth
16 March 2011









TH:VP:FORTE:024                                                            Liability limited by a scheme approved
                                                                           under Professional Standards
                                                                           Legislation

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