ABX GROUP LIMITED — Capital/Financing Update 2011

Sep 18, 2011

ASX ANNOUNCEMENT 19 September 2011

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AUSTRALIAN BAUXITE LIMITED ASX: ABZ

High Grade “Brown Sugar” Bauxite at Binjour, QLD Extended Over a Wide Area. Maiden Resource Estimation Commenced. Progress and Strategy Update

• 89 holes intersected high quality, thick bauxite at Binjour, Central QLD

• Bauxite drill intercepts have been recorded in 4 locations in an area 8km x 4km

• The first-discovered bauxite deposit at Swains Plateau was subjected to follow-up drilling in July and was found to be a coherent deposit of significant tonnage and quality

• Swains Plateau bauxite deposit was recently infill-drilled at a drill spacing sufficient to complete a maiden resource estimate for part of the deposit – now underway

• Follow-up drilling of the other bauxite occurrences will also continue at Binjour for another two months whilst the Swains Plateau maiden resource is being estimated.

Emerging bauxite exploration and development company, Australian Bauxite Limited (ABx, ASX Code ABZ) has received laboratory results from drilling at its Binjour project in central QLD (see Figure 1).

89 holes intersected a thick layer of bauxite located beneath a surface clay horizon, including some exceptionally high grade, thick gibbsite bauxite, ideal as a “sweetener” to any bauxite refinery. Complete results are listed in the Appendix and averaged in Table 1 as follows:

Table 1: Summary of 89 Drill Intercepts at Binjour, Central QLD

Strip ratio (waste/bauxite) Strip ratio (waste/bauxite)

Australian Bauxite CEO Ian Levy said; “Binjour is proving to be a fine bauxite deposit, containing premium grade bauxite, with good potential for more discoveries, including new discoveries of bauxite lying right at surface.

“Binjour project is destined to sell large tonnages of bauxite to alumina refineries needing “sweetener” bauxite that processes at low temperature and with low reactive silica contents.

“We call this “Brown Sugar” bauxite – sweet and greatly sort after. It will become a brand name.

AUSTRALIAN BAUXITE LIMITED

ACN 139 494 885

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Figure 1: Location

Level 2 Hudson House 131 Macquarie Street Sydney NSW 2000 P: +61 2 9251 7177 F: +61 2 9251 7500 E: corporate@australianbauxite.com.au

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Figure 2: Binjour Bauxite Drillholes Available Al2O3/Reactive SiO2 Ratios

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Logistical Setting

In addition to the sealed Burnett Highway, a disused rail line sits at the southern end of the Binjour lease which has a low tonnage capacity unless significantly upgraded. Engineering studies and government discussions have been underway for several months to find a cost-effective solution. The Binjour project is near regional cities, power, water and a pro-development workforce.

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Resource Estimation Underway

Good continuity of bauxite qualities and thickness on Swains Plateau may lead to a maiden resource estimation, albeit based only on those parts of the deposit that have had sufficient infill drilling. The extent of bauxite is being extended substantially as drilling continues.

Further Work Planned

The Swains Plateau bauxite deposit is open in many locations and at least four other deposits have been identified. Follow-up drilling of the latest bauxite discoveries at Binjour is scheduled to continue for October-November; such is the potential at Binjour.

It is planned to restart a second drill rig to test other deposits as soon as a rig and field team is in place.

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For further information please contact:

Investor Relations, Henry Kinstlinger, Australian Bauxite Limited Telephone: +61 2 9251 7177 Fax: +61 2 9251 7500 www.australianbauxite.com.au Email: corporate@australianbauxite.com.au

Qualifying statement

The information in this announcement that relate to Exploration Information are based on information compiled by Jacob Rebek and Ian Levy who are members of The Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Mr Rebek and Mr Levy are qualified geologists and are directors of Australian Bauxite Limited.

Mr Rebek and Mr Levy have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are 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 Resources. Mr Rebek and Mr Levy have consented to the inclusion in this announcement of the Exploration Information in the form and context in which it appears.

About Australian Bauxite Limited: ASX Code ABZ

Australian Bauxite Limited (ABx) holds the core of the newly discovered Eastern Australian Bauxite Province. Its 37 bauxite tenements in Queensland, NSW and Tasmania covering 8,500 km[2] were rigorously selected on 3 principles:

1. good quality bauxite;

2. proximity to infrastructure connected to export ports; and,

3. free of socio-environmental or native title land constraints.

All tenements are 100% owned and free of obligations for processing and third-party royalties. ABx has already discovered many bauxite deposits and new discoveries are still being made as knowledge and expertise grows.

The company’s bauxite is high quality and can be processed into alumina at low temperature – the type that is in short-supply globally. Global resources declared to date are 68 million tonnes. At the company’s first drilling prospect in Inverell, northern NSW, an interim resource of 35 million tonnes[1] has been reported from drilling 15% to 20% of the area prospective for bauxite and a resource of 25 million tonnes[2] of bauxite has been reported at the Taralga project in southern NSW. 6 million tonnes maiden resource was declared at Guyra[3] . Results from the Binjour Plateau in central QLD confirm that ABx has discovered a significant bauxite deposit including some bauxite of outstandingly high quality. Australian Bauxite Limited aspires to identify large bauxite resources in the Eastern Australian Bauxite Province which is emerging as one of the world’s best bauxite provinces.

ABx has the potential to create significant bauxite developments in three states - Queensland, New South Wales and Tasmania. Its bauxite deposits are favourably located for direct shipping of bauxite to both local and export customers.

ABx endorses best practices on agricultural land, strives to leave land and environment better than we find it. We only operate where welcomed.

• The following are JORC-compliant Public Reports released to the ASX declaring the JORC resources referred to. These can be viewed on the ASX website and the Company will provide these reports, free of charge on request.

• 1 02/09/2010 ASX Inverell JORC Resource Update

• 2 12/05/2011 ASX Taralga Bauxite Resource Doubled to 25 Million Tonnes

• 3 15/08/2011 ASX Maiden Guyra Resource, 6 Million Tonnes

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APPENDIX: BAUXITE INTERCEPTS AT BINJOUR

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Table Continued overleaf

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Appendix continued

Strip ratio (waste/bauxite)

ASX Announcement 19 September 2011 Page 6

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Figure 3: Project Tenements and Major Infrastructure – 3Qtr 2011