ABN 11 113 931 105

HALF-YEAR REPORT

CONDENSED FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

This Half-Year Report should be read in conjunction with the Company’s

Annual Report for the year ended 30 June 2008

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EAGLE EYE METALS LIMITED ABN 11 113 931 105

Contents

Corporate Information 2

Directors’ Report 3

Auditor’s Independence Declaration 5

Condensed Income Statement 6

Condensed Balance Sheet 7

Condensed Statement of Changes in Equity 8

Condensed Cash Flow Statement 9

Condensed Notes to the Interim Financial Report 10

Directors’ Declaration 14

Independent Audit Review Report 15

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EAGLE EYE METALS LIMITED ABN 11 113 931 105

Corporate Information

This Condensed Report covers the activities of Eagle Eye Metals Limited ABN 11 113 931 105 for the half-year ended 31 December 2008. The Company’s functional and presentation currency is Australian Dollars (AUD). A review of the Company’s principal activities and operations is included in the Directors’ Report at page 3. The Directors’ Report is unaudited and does not form part of this Condensed Financial Report.

Directors

Wayne Ryder FCA, FAICD, SME(U.S.) – Executive Chairman Warren Staude BSc, MSc, MAusIMM, ASIA – Non-Executive Garry Plowright – Non-Executive

Secretary

Wayne Ryder FCA

Registered and Operations Office

45 Ventnor Avenue West Perth WA 6005 (08) 9389 4450 Email: wayne@eagleeyemetals.com Web site: www.eagleeyemetals.com

Consulting Geologists

Rocworth Consulting Benjamin Bell BSc, MMET,MBA – Senior Geologist PO Box 937 West Perth WA 6872

Auditors

Grant Thornton (WA) Partnership Chartered Accountants Level 1, 10 Kings Park Road West Perth WA 6005

Solicitors

Hardy Bowen Lawyers Level 1, 28 Ord Street West Perth WA 6005 F

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EAGLE EYE METALS LIMITED

Directors’ Report

Your Directors are pleased to submit their Report for the half-year ended 31 December 2008.

The following were the Directors of the Company in office during the half-year under review and at the date of this Report:

Wayne Ryder – Executive Chairman Warren Staude Garry Plowright

PRINCIPAL ACTIVITY

The Company’s principal activity during the half-year was minerals exploration.

REVIEW OF EXPLORATION ACTIVITIES

Waite Kauri nickel/cobalt project

During the half-year Eagle Eye established at this project near Leonora, Western Australia a resource of 2.53Mt of nickel @0.7% nickel and 0.05% cobalt, equating to 17,000 tonnes of contained nickel and 1,520 tonnes of cobalt.

The Company entered in to a Joint Venture over the project with Poseidon Nickel Limited to further develop the project, with the eventual aim of processing the ore at Poseidon’s nickel processing facility being planned for construction at nearby Windarra. Eagle Eye is free carried for the next $500,000 of exploration expenditure in respect of its retained 20% interest in the project. We will also receive a 2% net smelter royalty from Poseidon in respect of its 80% share of nickel/cobalt produced. Please refer to Note 4 for more detailed information regarding the structure of the Joint Venture.

With the price of nickel having declined significantly over recent months, Poseidon is awaiting an improvement in the price before making a decision on whether or not to go ahead with mining of its own and Eagle Eye’s ore.

Other exploration projects

The world’s financial crisis has not prompted any major shift in Eagle Eye’s exploration and development policy since Listing on ASX in late 2006. The continuing policy is to carefully research and assess our projects before implementing expensive exploration work, so as to get the best results for the minimum possible expenditure.

Eagle Eye was originally intended as a primarily gold search Float. This well fits the founders and Directors considerable knowledge in this metal and the acquisition of a portfolio of excellent mostly gold prospects in the Leonora/Laverton region of the North Eastern Goldfields of Western Australia, a world renowned gold producing area. However, initial search focus was deliberately shifted to the Company’s Waite Kauri nickel/cobalt project due to a massive increase in world demand and price for these metals. Now that this project has been Joint Ventured out, we are focusing strongly on gold opportunities, certainly a preferred metal in these troubled economic times.

The Company in consultation with our consulting geologist’s is working up exploration and drilling programs for implementation over the next several months on its highly prospective Western Australian gold exploration projects at Apollo Hill, Erlistoun, Little Doris, Wandry Well and Randwick.

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10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

Grant Thornton (WA) Partnership ABN 17 735 344 518, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation.

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AUDITOR’S INDEPENDENCE DECLARATION

TO THE DIRECTORS OF EAGLE EYE METALS LIMITED

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead

auditor for the review of Eagle Eye Metals Limited for the half-year ended 31 December

2008, I declare that, to the best of my knowledge and belief, there have been:

a No contraventions of the auditor independence requirements of the Corporations

Act 2001 in relation to the review; and

b No contraventions of any applicable code of professional conduct in relation to the

review.

GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants M J Hillgrove Partner Perth, 5 March 2009

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EAGLE EYE METALS LIMITED

Condensed Income Statement FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

31 Dec 2008

$

31 Dec 2007

$ INCOME

Interest received 89,740 135,064

----------- ----------- TOTAL INCOME 89,740 135,064

----------- ----------- EXPENSES

Wages and salaries 42,000 48,761 Superannuation 48,000 41,239 Accounting, management, consulting fees 53,874 20,861 Audit fees 9,235 1,625 Bank charges 292 256Depreciation and fixed assets written off 3,385 -ASX listing fees 20,106 23,317 Office rent 25,636 23,692 Phone, fax, computer expenses 5,142 -Legal fees 2,639 361Share registry expenses 2,461 4,137 Public relations, entertainment and promotion expenses 17,120 21,893 Travel 12,516 1,364 Printing, postages, stationery 2,403 1,665 Other administration expenses 32,650 36,217 Exploration expenditure written off 70,000 -Impairment of financial assets 155,000 -

----------- ----------- TOTAL EXPENSES 502,459 225,388

----------- ----------- NET LOSS BEFORE INCOME TAX (412,719) (90,324)

INCOME TAX - - ------------ -----------

-LOSS AFTER INCOME TAX (412,719) (90,324)

======= =======Earnings per share for loss attributable to ordinary equity holders: Basic earnings per share (cents) (0.9) (0.2) Diluted earnings per share (cents) (0.9) (0.2)

The condensed income statement is to be read in conjunction with the condensed notes to the interim financial

report.

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EAGLE EYE METALS LIMITED

Condensed Balance Sheet AS AT 31 DECEMBER 2008

Note 31 Dec

2008 $

30 Jun 2008

$ ASSETS

Current Assets

Cash and cash equivalents 2,593,844 3,034,678 Other current assets 6,000 10,700

----------- ----------- Total Current Assets 2,599,844 3,045,378

----------- ---------- Non-Current Assets

Financial assets 87,500 242,500 Property, plant and equipment 8,965 8,345 Mining tenements and exploration costs 4 1,674,783 1,491,141

----------- ----------- Total Non-Current Assets 1,771,248 1,741,986

----------- ----------- TOTAL ASSETS 4,371,092 4,787,364

====== ======LIABILITIES

Current Liabilities

Trade and other payables 35,740 83,293 ----------- -----------

TOTAL LIABILITIES 35,740 83,293 ====== ======

NET ASSETS 4,335,352 4,704,071 ====== ======

EQUITY

Issued capital 3 5,499,754 5,499,754 Options reserve 3 44,000 -Accumulated losses (1,208,402) (795,683)

----------- ---------- TOTAL EQUITY 4,335,352 4,704,071

====== ======

The condensed balance sheet is to be read in conjunction with the notes to the interim financial report.

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EAGLE EYE METALS LIMITED

Condensed Statement of Changes in Equity FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

The condensed statement of changes in equity is to be read in conjunction with the condensed notes to the

interim financial report.

Note

Ordinary Share Capital

$

Accumulated Losses

$

Options Reserve

$

Total

$

Balance at 1 July 2007 3 5,499,754 (604,328) - 4,895,426

Loss attributable to members - (90,324) - (90,324)

Balance at 31 December 2007 3 5,499,754 (694,652) - 4,805,102

Current half-year loss - (101,031) - (101,031)

Balance at 30 June 2008 3 5,499,754 (795,683) - 4,704,071

Loss attributable to Members - (412,719) - (412,719)

Options reserve 3 - - 44,000 44,000

Balance at 31 December 2008 3 5,499,754 (1,208,402) 44,000 4,335,352

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EAGLE EYE METALS LIMITED

Condensed Cash Flow Statement FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

31 Dec 2008

$

31 Dec 2007

$

Cash flows from operating activities

Interest received 89,740 135,064 Payments to suppliers and employees (312,624) (286,513) Fringe benefits taxation paid (4,303) -

------------ ------------ Cash flows (used in)/ provided from operating activities (227,187) (151,449)

------------ ------------ Cash flows from Investing activities

Exploration and Tenement Costs (209,642) (181,581) Purchases of property, plant and equipment (4,005) (480)

------------ ------------ Cash flows (used in)/provided from investing activities (213,647) (182,061)

------------ ------------ Cash flows from financing activities

Proceeds from issue of securities - -Proceeds from borrowings - -Repayment of borrowings - -Share issue expenses - -

------------ ------------ Cash flows (used in)/ provided from financing activities - -

------------ ------------ Net increase/(decrease) in cash and cash equivalents (440,834) (333,510)

Cash and cash equivalents at the beginning of the half-year 3,034,678 3,860,832 ------------ ------------

Cash and cash equivalents at the end of the half-year 2,593,844 3,527,322 ======= =======

The condensed cash flow statement is to be read in conjunction with the condensed notes to the interim financial

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EAGLE EYE METALS LIMITED

Condensed Notes to the Interim Financial ReportFOR THE HALF-YEAR ENDED 31 DECEMBER 2008

1. BASIS OF PREPARATION AND ACCOUNTING POLICIES

Basis of preparation

This general purpose condensed financial report for the half-year ended 31 December 2008 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 Company as the full financial report.

It is recommended that the half-year financial report be read in conjunction with the annual report for the year ended 30 June 2008 and considered together with any public announcements made by the Company during the half-year ended 31 December 2008 in accordance with the continuous disclosure obligations of the ASX listing rules.

Reporting basis and conventions: The half-year financial 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.

New Accounting Standards and Interpretations

These condensed interim financial statements (the interim financial statements) have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 June 2008. The accounting policies have been applied consistently for the purposes of preparation of these condensed interim financial statements.

The following applicable standards have been issued but have not been early adopted: • AASB 101: Presentation of Financial Statements (Revised 2007) • AASB 8: Operating Segments

AASB 101 (Revised 2007) makes certain changes to the format and titles of the primary financial statements and to the presentation of some items within these statements. It also gives rise to additional disclosures. The measurement and recognition of the Company's assets, liabilities, income and expenses is unchanged. AASB 101 affects the presentation of owner changes in equity and introduces a 'Statement of comprehensive income'. A 'Statement of changes in equity' is now presented as a primary statement.

AASB 8 now reports segment results based on internal management reporting information that is regularly reviewed by the chief operating decision maker. In the previous annual and interim financial statements, segments were identified by reference to the dominant source and nature of the Company's risks and returns. This may result in a different set of segments being identified than those previously disclosed under AASB 114.

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EAGLE EYE METALS LIMITED

Condensed Notes to the Financial Report (cont.) FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

2. SEGMENT REPORTING

The Company is engaged in the mineral exploration industry in Australia. There are therefore no business segments requiring reporting upon.

3. ISSUED CAPITAL

31 Dec 2008 $

30 Jun 2008$

44,010,000 (2007:44,010,000) fully paid ordinary shares 5,499,754 5,499,754

======= =======

Movements:-

2007 No. Shares

$

No. Options

$

Contributed equity at 1 July 2007 44,010,000 5,499,754 37,565,000 - ------------ ------------ ------------- ------------

Shares and options issued - - - -Less – share issue expenses - - - -

------------ ------------ ------------- ------------ Net equity funds raised - - - -

------------ ------------ ------------- ------------ Contributed equity at 31 December 2007 44,010,000 5,499,754 37,565,000 -

------------ ------------ ------------- ------------

2008

Contributed equity at 1 July 2007 44,010,000 5,499,754 37,565,000 - ------------ ------------ ------------- ------------

Shares and options issued - - 4,000,000 44,000 Less – share issue expenses - - - -

------------ ------------ ------------- ------------ Net equity funds raised - - - -

------------ ------------ ------------ ------------ Contributed equity at 31 December 2008 44,010,000 5,499,754 41,565,000 44,000

======= ======= ======= =======

The 4,000,000 options issued were for services rendered during the half-year to 31 December 2008. They were listed on ASX and were issued at market value. Their issue value of $44,000 has been transferred to an options reserve.

Ordinary shares participate in dividends and the proceeds on winding up of the entity in proportion to the number of shares held.

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EAGLE EYE METALS LIMITED

Condensed Notes to the Financial Report (cont.) FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

At Shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

At 31 December 2008 there were 41,565,000 unissued shares (2007: 37,565,000) in respect of which options are outstanding exercisable on or before 30 June 2010 at an exercise price of 20 cents each.

4. EXPENDITURE COMMITMENTS

The Company has certain obligations to perform minimum exploration work and to expend minimum amounts of money on such work on mining tenements. These obligations may be varied from time to time subject to approval and are expected to be fulfilled in the normal course of the operations of the Company. The estimated amount of these commitments at 31 December 2008 to 30 June 2009 is $240,000.

Of the $1,674,683 currently recognised as mining tenements and exploration costs, $833,043 relates to expenditure incurred on the White Kauri nickel/cobalt project. During the period, the Company entered into a Joint Venture/Farm-in agreement with Poseidon Nickel Limited over this project. Under the terms of the Joint Venture/Farm-in agreement the Company has no expenditure commitments until and unless Poseidon have spent $500,000 on the further exploration and development of the project. Poseidon have until 24 October 2009 or a mutually agreed extended date to spend the first $50,000, at which time the title to the project tenements, but excluding the ore resource, will be transferred to them. To earn their 80% interest in the ore resource Poseidon will then be required to spend a further $450,000 on the project.

Once Poseidon have earned their 80% interest in the ore resource Eagle Eye may elect to commence further expenditure contributions in respect of its 20% interest and receive that share of profits from the sale of metals produced, plus a 2% Net Smelter Royalty on Poseidon’s 80% share of metals produced. Alternatively, Eagle Eye may elect to transfer its interest to Poseidon and receive a 2% Net Smelter Royalty in respect of 100% of metals produced.

Should Poseidon not meet its expenditure requirements then Eagle Eye may terminate the Joint Venture/Farm-in agreement and retain 100% beneficial ownership of the ore resource (The project tenements remain with Poseidon). At that time the Company would then become liable for any further costs of exploration and development of the project, unless it chose to abandon the project, enter into another joint venture with another party or sell the interest in the ore resource.

The Directors’ assessment of the carrying amount of the mining tenements and exploration costs was based on consideration of prevailing market conditions; previous expenditure carried out on the tenements; and the potential for mineralisation based on both the entity’s and independent geological reports. The ultimate value of these assets is dependent upon recoupment by commercial development or the sale of the whole, or part, of the Company’s interests in those areas for an amount at least equal to the carrying value.

5. CONTINGENT LIABILITY

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

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EAGLE EYE METALS LIMITED

Condensed Notes to the Financial Report (cont.)FOR THE HALF-YEAR ENDED 31 DECEMBER 2008

6. EVENTS SUBSEQUENT TO REPORTING DATE

Other than as referred to in the Directors’ Report no matters or circumstances have arisen since the end of the half-year which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company.

7. RELATED PARTIES

Transactions between related parties are on normal commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated. Transactions with related parties for the half-year were:-

i) Salary, superannuation, accounting and management fees paid to Wayne Ryder and entities associated with him amounting to $127,500. (31 December 2007: $120,800).

ii) Consultancy fees paid to Warren Staude and entities associated with him amounting to $15,000 (31 December 2007: $15,000).

iii) Tenement maintenance service fees paid to Garry Plowright and entities associated with him amounting to $30,000 (31 December 2007: $30,000).

iv) General exploration consultancy service fees paid to Tim Colclough and entities associated with him amounting to $nil (31 December 2007: $12,500).

Directors’ share holdings and option holdings at 31 December 2008 were:-

Director Shares held directly

Shares held indirectly

Options held directly

Options held indirectly

Wayne Ryder 5,860,000 1,488,193 625,000 1,145,000 Warren Staude 600,000 - 600,000 -Garry Plowright - 1,060,000 - 1,060,000

-------------- -------------- -------------- -------------- 6,460,000 2,548,193 1,225,000 2,205,000

======== ======== ======== ========

Directors’ share holdings and option holdings at 31 December 2007 were:-

Director Shares held directly

Shares held indirectly

Options held directly

Options held indirectly

Wayne Ryder 3,125,000 230,000 625,000 230,000 Warren Staude 600,000 - 600,000 -Garry Plowright - 1,060,000 - 1,060,000 -------------- -------------- -------------- --------------

3,725,000 1,290,000 1,225,000 1,290,000 ======== ======== ======== ========

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10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

Grant Thornton (WA) Partnership ABN 17 735 344 518, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation. Page 15

INDEPENDENT AUDITOR’S REVIEW REPORT

TO THE MEMBERS OF EAGLE EYE METALS LIMITED

Report on the half-year financial report

We have reviewed the accompanying half-year financial report of Eagle Eye Metals Limited,

which comprises the condensed balance sheet as at 31 December 2008, 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, and other

selected explanatory notes.

Directors’ responsibility for the half-year financial report

The directors of the company are responsible for the preparation and fair presentation of

the half-year financial report in accordance with Australian Accounting Standards including

the Australian Accounting Interpretations and the Corporations Act 2001. This

responsibility includes establishing 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

Engagement ASRE 2410: Review of an 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 company’s financial position as at 31 December 2008 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 Eagle Eye Metals Limited, ASRE 2410 requires that we comply with the ethical

requirements relevant to the audit of the annual financial report.

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Grant Thornton (WA) Partnership ABN 17 735 344 518, a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389.

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation. Page 16

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 complied with the independence requirements of the Australian professional ethical pronouncements and the Corporations Act 2001.

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 Eagle Eye Metals 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

2008 and of its performance for the half-year ended on that date; and

b complying with Australian Accounting Standard AASB 134 Interim Financial

Reporting and the Corporations Regulations 2001.

GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants M J Hillgrove Partner Perth, 5 March 2009

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