ADVANCE METALS LIMITED — Capital/Financing Update 2009

Nov 23, 2009

ABN 31 109 933 995

24 November 2009

The Manager Companies Australian Stock Exchange 20 Bridge Street SYDNEY NSW 2000

Dear Sir

INSTITUTIONAL PLACEMENT & RIGHTS ISSUE TO RAISE UP TO $15 MILLION

Highlights

• $10 million placement to institutions and professional investors.

• Rights Issue to raise up to $5.3 million also planned to complete the $15 million equity leg of the funding strategy.

• Placement and Rights Issue price to be 23 cents, a 20% discount to the 5 day volume weighted average price.

• A further $10 million banking/off-take finance facility is planned ensuring sufficient funds to commence development of the Hellyer Mine project and accelerate exploration drilling of new target areas, as well as providing general working capital support.

Bass Metals is pleased to announce a $10 million placement to largely new institutional investors, subject to shareholder approval. This is part of an integrated fundraising strategy that includes a Rights Issue to existing shareholders to raise up to a further $5.3 million. This $15 million capital raising in combination with a planned $10 to $15 million banking and/or concentrate pre-payment facility, will generate sufficient cash for the Company to undertake its Fossey Mine development and accelerate testing of its new exploration targets in the Hellyer-Que River region.

Placement

The Company intends to raise $10,000,000 (before costs) through the issue of 43,478,261 shares at 23 cents to a range of Australian and overseas institutions and professional investors. Element Capital is managing the placement process which was oversubscribed.

The Placement will be completed in two tranches:

• Tranche A comprising 15,207,320 shares will be issued under the Company’s existing 15% capacity by early December; and,

• Tranche B comprising 28,270,941 shares is subject to shareholder approval and therefore is not expected to be issued until late January 2010. The Company plans to convene a General Meeting of Shareholders for mid January 2010 to approve the issue of the Tranche B shares. A Notice of Meeting will be issued to shareholders in due course.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Rights Issue

Bass Metals also plans to raise up to a further $5.3 million (before costs) through a pro rata entitlement offer (Rights Issue) to current shareholders at the same price of 23 cents as the Institutional placement. The Rights Issue will comprise an offer of 2 shares for every 9 shares held by shareholders registered in Australia or New Zealand at the record date.

This issue is not underwritten, but the Company’s major shareholder, Metals Finance Limited has indicated its intention to participate to the full extent of its entitlement (20.8%). In conjunction with the Rights Issue, eligible shareholders will be offered an opportunity to apply for additional shares under any shortfall. The shortfall to the Rights Issue may be placed by the Directors of the Company at their sole discretion to any party, other than to related parties, within three months of the close of the Rights Issue.

Full details of the Rights Issue, the proposed timetable and associated Appendix 3B are set out in the separate announcement to ASX lodged immediately following this announcement.

Commentary

This is a significant fund raising for Bass Metals and the Board is very appreciative for the support it has received from its new investors which comprises mainly institutions including several significant resource focussed funds. The Directors have strived to achieve a balance between providing an opportunity for its existing shareholders to participate in the raising as well as to attract new professional investors to generate further financial strength on the share register; hence the offer price is the same for all parties.

This funding strategy is planned to provide sufficient funds to complete the development of the new Fossey Mine and to increase exploration work on recently generated, exciting new mineralisation targets in the Hellyer-Que River area, as well as to provide general working capital support.

The Company deliberately chose to retain maximum flexibility with respect to how and to whom it markets its concentrate products by electing to raise additional equity rather than commit to long-term concentrate sales agreements. This has resulted in more competitive terms from smelters and metals traders which improves the modelled financial benefit to the Company and hence its shareholders. On a stand-alone basis the funding requirement to get the mine and Hellyer Mill into production had been estimated by Bass Metals to be $20 to $25 million. Improved smelter payment terms are expected to reduce this estimate. Bass Metals intends to utilise $10 million of this equity raising toward the Fossey mine development with the balance being made up by a bank facility and/or concentrate pre-payments. The Company is currently in advanced discussions with several banks and smelters on these financing facilities.

The funds from the Rights Issue are planned to be allocated largely toward accelerating the current exploration programme. The application of new exploration techniques has generated many new high priority targets in close proximity to the Company’s Hellyer Mill which the Board would like to assess on a fast-tracked basis.

The Directors are encouraged by the strong demand for the placement shares as it is an endorsement of the Company’s plans and strategy.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

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This is clearly a major transformational step for the Company as it seeks to significantly expand its production profile from its high grade polymetallic resource base. The Fossey Mine development is the first phase of what the Company plans will be a long term, large scale mining and processing operation based on its current high-grade polymetallic resources. A particularly encouraging aspect of the Fossey mine development is its anticipated overall low C1 production costs which are estimated to be US$0.33/lb payable zinc after credits – placing it in the lower third of the world zinc production cost-curve. The Company considers that it is well advanced on its funding and approvals process and plans to be in production within 12 months.

Further announcements providing details on the Rights Issue will follow and I look forward to providing further updates on exploration and mine development outcomes.

Yours Sincerely

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Mike Rosenstreich Managing Director

Competent Person

The information within this report that relates to exploration results is based on information compiled by Mr Kim Denwer and Mr Mike Rosenstreich who are both full time employees of the Company. Mr Rosenstreich is a Member of The Australasian Institute of Mining and Metallurgy and Mr Denwer is a Member of the Australian Institute of Geoscientists. They both, individually have sufficient experience relevant to the styles of mineralisation and types of deposits under consideration and to the activities currently being undertaken to qualify as a Competent Person(s) as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and they consent to the inclusion of this information in the form and context in which it appears in this report.

Technical Detail

This Report aims to provide a high level summary of various technical aspects of the Company’s projects. For more details on the underlying technical parameters the reader is referred to the ASX Reports on the Bass Metals’ website, www.bassmetals.com.au .

Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Bass Metals Ltd’s planned development and exploration programmes and other statements that are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Bass Metals Ltd believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au