ABX GROUP LIMITED — Capital/Financing Update 2011

Jun 27, 2011

28 June 2011

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ASX ANNOUNCEMENT

AUSTRALIAN BAUXITE LIMITED ASX: ABZ

High Grade “Brown Sugar” Bauxite Discovery at Guyra, NSW Progress and Strategy Update

• 63 holes intersected high quality thick bauxite at Guyra, Northern NSW

• The discovery of this concealed bauxite layer confirms that the company’s exploration knowledge is advancing significantly across all projects

• Exceptionally high quality intercepts show that the Guyra bauxite layer may contain large tonnages of superior quality bauxite suitable for sweetening circuits in refineries

• Guyra lies immediately adjacent to a major rail line and may be a co-development with the company’s large Inverell bauxite deposit.

• Resource estimation of a maiden resource at Guyra is now being assessed

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

63 holes intersected a thick layer of bauxite located beneath a thin 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 63 Drillhole Intercepts at Guyra, Northern NSW

Hole No	From m	To m	Length m	Yield % wt	Al2O3avl %	Rx SiO2 %	Avl/Rx ratio	Al2O3 %	SiO2 %	A/S ratio	Fe2O3 %	TiO2 %	LOI %
Average all holes	4.6	9.4	4.8	59%	36.6 2.2 16.5			42.7 2.8 15.3			24.7 3.7 24.0
Stripratio(waste/ore) 1.0
Best 25 holes	4.2	11.0	6.6	59%	38.2 1.9 19.8			43.5 2.5 17.6			24.5 3.9 24.3
Stripratio(waste/ore) 0.6

Leach conditions to measure available Al2O3avl & reactive Rx SiO2 is 1g leached in 10ml of 90gpl NaOH at 143 degrees C for 30 mins. "Avl/Srx" ratio is (Al203 avl)/(Rx SiO2). Values above 10 are excellent. "A/S" ratio is Al203)/SiO2. Yield is for screening at 0.26mm. If a different beneficiation method is used, yield will be different. Tonnages requiring no upgrade will have 100% yield.

Australian Bauxite CEO Ian Levy said; “This is our 2[nd] discovery of premium quality bauxite concealed under a thin clay layer. We hope to find a lot more.

“We may be able to sell large tonnages to bauxite-alumina refineries needing “sweetener” bauxite that processes at low temperature and has very low reactive silica contents.

“We’ve called this bauxite type “Brown Sugar” bauxite – sweet and greatly sort after. It may become a brand name in the industry one day.

“Being next to rail may help the Inverell-Guyra project get started early.”

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Inverell
Guyra Discovery
Figure 1: Location
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AUSTRALIAN BAUXITE LIMITED

ACN 139 494 885

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

ASX Announcement 28 June 2011 Page 2

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Figure 2: Guyra Drillhole Locations

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Guyra Drillholes
June 2011
Drillhole – general
High Grade, thick bauxite
1km
6660000N
Armidale 40km
Newcastle 370km 6655000N
Guyra
Rail Line
Highway
370000E 375000E
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Logistical Setting

The best part of the bauxite discovered to date is immediately adjacent the standard gauge rail line connecting Guyra to Armidale, Werris Creek and thence to the heavy-duty rail to Newcastle minerals export port. Operations of the Guyra-Armidale rail has recently been suspended but the rail line is still in good condition, having recently been used for transportation of logging products.

Review of Environmental Factors

A Review of Environmental Factors (REF) has been submitted to the Department of Industry and Investment and is currently under consideration.

Resource Estimation Underway

Good continuity of bauxite qualities and thickness in places may lead to a maiden resource estimation, albeit based on only partial drilling of deposit zones that are still open and likely to be extended in coming months.

Further Work Planned

The bauxite deposit is open in many locations and many other deposits have been identified. Followup drilling of the Guyra discovery is being scheduled over the coming months in line with the REF.

ASX Announcement 28 June 2011 Page 3

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APPENDIX: BAUXITE INTERCEPTS

					Leach 143degC Analyses	Leach 143degC Analyses	Leach 143degC Analyses	Total Analyses for Sieved at 0.26mm	Total Analyses for Sieved at 0.26mm	Total Analyses for Sieved at 0.26mm	Total Analyses for Sieved at 0.26mm	Total Analyses for Sieved at 0.26mm	Total Analyses for Sieved at 0.26mm
Hole No Northing Easting	From m	To m	Length m	Yield % wt	Al2O3avl %	Rx SiO2 %	Avl/Rx ratio	Al2O3 %	SiO2 %	A/S ratio	Fe2O3 %	TiO2 %	LOI %
GY055 6656563 369762 GY064 6655872 369420 GY076 6655415 368864 GY132 6658615 369070 GY135 6658203 368788 GY136 6658149 368863 GY138 6658109 368970 GY141 6658142 368867 GY142 6658196 368894 GY144 6658033 368968 GY145 6658081 368902 GY146 6658063 368781 GY149 6658441 369193 GY150 6658419 369189 GY151 6658331 369161 GY152 6658357 369223 GY162 6658608 373760 GY164 6658546 373835 GY165 6658582 374023 GY166 6658579 374111 GY167 6658556 374223 GY168 6658633 373842 GY171 6658525 373996 GY172 6658472 373912 GY175 6658555 373764 GY176 6658678 373648 GY179 6658807 373514 GY180 6658798 373453 GY181 6658884 373487 GY182 6659006 373499 GY185 6658802 373414 GY186 6658764 373479 GY187 6658731 373549 GY188 6658706 373483 GY189 6658638 373475 GY190 6658566 373482 GY191 6658535 373440 GY208 6658287 373152 GY213 6658694 373246 GY214 6658482 373376 GY215 6658522 373248 GY216 6658575 373322 GY217 6658582 373414 GY219 6658674 373325 GY220 6658623 373358 GY222 6658751 373275 GY223 6658774 373361 GY224 6658844 373371 GY225 6658781 373216 GY226 6658763 373166 GY228 6658829 373292	0.0 1.5 3.0 0.0 2.0 0.0 6.0 0.0 8.0 1.0 0.0 3.0 6.0 1.0 1.0 10.0 0.0 0.0 2.0 5.0 15.0 0.0 6.0 6.0 2.0 1.0 0.0 5.0 1.0 7.0 6.0 0.0 0.0 0.0 8.0 6.0 7.0 13.0 2.0 1.0 9.0 1.0 7.0 1.0 1.0 6.0 5.0 5.0 21.0 18.0 8.0	3.0 5.0 6.0 6.0 4.0 5.0 10.0 4.0 12.0 3.0 5.0 7.0 8.0 3.0 4.0 12.0 5.0 10.0 10.0 11.0 22.0 8.0 11.0 14.0 7.0 7.0 4.0 8.0 10.0 10.0 11.0 8.0 2.0 8.0 11.0 13.0 13.0 15.0 10.0 5.0 16.0 3.0 11.0 5.0 6.0 12.0 12.0 14.0 23.0 23.0 13.0	3.0 3.5 3.0 6.0 2.0 5.0 4.0 4.0 4.0 2.0 5.0 4.0 2.0 2.0 3.0 2.0 5.0 8.0 8.0 6.0 7.0 8.0 5.0 8.0 5.0 6.0 4.0 3.0 9.0 3.0 5.0 8.0 2.0 7.0 3.0 7.0 6.0 2.0 8.0 4.0 7.0 2.0 4.0 4.0 5.0 6.0 7.0 9.0 2.0 5.0 5.0	65% 59% 37% 61% 35% 56% 66% 67% 70% 48% 71% 71% 48% 62% 66% 61% 71% 75% 60% 61% 67% 77% 74% 66% 76% 54% 59% 71% 55% 52% 54% 47% 49% 56% 44% 45% 49% 48% 42% 68% 57% 51% 66% 59% 61% 57% 66% 49% 46% 37% 45%	28.7 3.4 8.5 27.1 1.4 19.8 31.9 3.9 8.2 39.8 2.0 20.0 41.4 2.9 14.1 27.3 2.8 9.8 31.3 3.1 10.0 40.2 3.4 11.9 37.0 2.9 12.6 41.1 6.1 6.7 44.0 2.5 17.5 35.8 6.7 5.3 35.9 3.4 10.7 36.6 2.6 14.1 38.6 2.3 16.8 30.9 2.0 15.4 37.6 1.9 19.9 37.3 1.9 19.2 39.8 1.0 41.6 36.1 1.7 20.8 34.8 4.2 8.2 34.7 2.6 13.6 31.7 1.9 16.6 34.3 2.2 15.3 39.3 1.8 21.5 34.3 1.7 20.7 39.2 1.1 34.4 29.2 1.9 15.2 38.2 1.2 30.7 32.7 2.5 13.3 41.2 1.5 28.4 41.1 1.5 27.2 28.8 2.0 14.4 41.3 1.2 35.7 29.7 2.5 11.7 38.3 1.5 25.7 30.8 2.2 14.2 35.5 2.5 14.3 40.8 2.4 16.7 39.8 2.2 18.5 35.0 2.2 16.0 35.4 1.7 20.3 32.1 2.3 13.9 37.5 3.1 12.0 38.0 1.8 20.7 42.5 1.7 25.5 39.4 1.6 24.3 41.4 1.7 23.9 36.7 2.8 13.1 31.4 1.9 16.6 37.4 2.2 16.7			36.9 4.4 8.3 33.5 1.7 19.2 39.5 4.4 9.0 43.7 2.6 17.0 45.2 3.8 11.9 32.3 3.4 9.5 49.9 3.7 13.6 46.6 4.2 11.0 46.5 3.5 13.4 48.6 7.3 6.7 48.4 3.2 15.3 45.2 7.1 6.4 44.8 4.0 11.1 42.0 3.0 14.0 44.1 3.2 13.6 39.1 2.4 16.1 41.9 2.5 16.7 43.2 2.4 18.3 42.8 1.4 31.4 40.6 2.3 17.3 41.4 5.0 8.3 39.5 3.1 12.9 37.3 2.5 14.8 40.4 2.8 14.4 44.6 2.3 19.3 40.0 2.5 16.1 43.4 1.8 24.4 36.6 2.4 15.4 43.4 1.7 25.0 38.0 3.3 11.7 44.4 1.7 25.4 45.5 1.9 24.4 33.9 3.1 10.8 45.2 1.6 28.4 39.3 3.1 12.5 43.3 2.1 21.0 42.1 2.8 15.2 41.1 3.1 13.2 45.4 2.9 15.7 44.7 2.7 16.5 41.0 2.8 14.7 39.8 3.2 12.6 40.5 2.8 14.5 43.4 3.7 11.9 42.7 2.3 18.8 47.4 2.7 17.8 47.0 2.1 22.5 46.5 2.0 23.1 45.0 3.4 13.3 46.0 2.3 20.2 45.8 2.7 17.1			30.8 4.4 21.2 20.7 3.3 18.2 26.8 4.3 22.8 24.4 3.5 24.7 22.0 2.2 26.0 18.7 2.2 17.7 21.0 2.7 21.7 20.7 3.1 24.3 21.8 2.8 24.4 14.5 2.8 26.0 18.4 3.3 25.8 18.8 3.0 24.7 22.7 3.6 23.8 25.8 4.1 23.9 23.6 2.9 24.8 26.1 2.8 26.5 25.5 3.9 24.6 24.6 4.5 24.1 26.3 3.7 24.4 29.1 3.5 22.8 24.9 4.1 23.4 28.6 3.9 23.5 32.8 3.7 22.0 28.2 3.7 23.4 23.3 3.8 24.9 28.7 4.1 23.2 25.1 4.0 24.4 32.4 4.7 22.1 24.6 3.9 24.6 30.1 3.0 23.6 23.4 3.7 25.3 21.7 3.9 25.8 38.1 3.0 20.0 22.2 3.9 25.7 29.1 4.2 22.5 25.4 3.5 24.4 27.9 3.7 22.1 27.0 3.1 24.1 21.5 3.8 25.4 22.4 4.0 25.1 27.3 4.3 23.4 28.5 3.0 23.5 28.6 4.0 22.6 22.9 3.7 25.0 25.4 4.3 24.1 20.9 3.9 24.1 21.1 3.6 24.9 20.2 3.7 26.3 21.9 3.2 25.1 24.7 3.7 22.0 22.0 4.0 24.2
Table Continued overleaf

ASX Announcement 28 June 2011 Page 4

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Appendix continued

Appendix continued	Appendix continued	Appendix continued	Appendix continued	Appendix continued
					Leach 143degC Analyses			Total Analyses for Sieved at 0.26mm
Hole No Northing Easting	From m	To m	Length m	Yield % wt	Al2O3avl %	Rx SiO2 %	Avl/Rx ratio	Al2O3 %	SiO2 %	A/S ratio	Fe2O3 %	TiO2 %	LOI %
GY229 6660471 374832 GY230 6660512 374785 GY248 6660496 374885 GY256 6658812 373159	0.0 12.0 5.0 19.0	4.0 14.0 8.0 24.0	4.0 2.0 3.0 5.0	63% 78% 50% 59%	37.3 2.5 15.1 25.3 2.1 12.2 33.5 2.6 12.8 41.9 1.2 34.6			42.1 3.0 14.1 32.6 2.8 11.7 39.8 3.4 11.6 44.7 1.9 23.9			26.0 3.7 23.7 26.3 2.8 30.2 25.2 3.4 25.8 24.7 3.7 23.6
Average all holes	4.6	9.4	4.8	59%	36.6 2.2 16.5			42.7 2.8 15.3			24.7 3.7 24.0
Stripratio(waste/ore) 1.0

Leach conditions to measure available Al2O3avl & reactive Rx SiO2 is 1g leached in 10ml of 90gpl NaOH at 143 degrees C for 30 mins. "Avl/Srx" ratio is (Al203 avl)/(Rx SiO2). Values above 10 are excellent. "A/S" ratio is Al203)/SiO2. Yield is for screening at 0.26mm. If a different beneficiation method is used, yield will be different. Tonnages requiring no upgrade will have 100% yield.

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 34 bauxite tenements in Queensland, NSW and Tasmania covering 8,000 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. 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. 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

ASX Announcement 28 June 2011 Page 5

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Figure 3: Project Tenements and Major Infrastructure – mid 2011