ALARA RESOURCES LIMITED — Capital/Financing Update 2012

Apr 30, 2012

Alara Resources Limited ABN 27 122 892 719 Level 14, The Forrest Centre 221 St Georges Terrace Perth WA 6000 Australia

Telephone | +61 8 9214 9787 Facsimile | +61 8 9322 1515 Web | www.alararesources.com E-mail | info@alararesources.com

==> picture [125 x 83] intentionally omitted <==

ASX/MEDIA RELEASE

1 May 2012

Drilling Update – El Quillay Project Chile

Perth: Australian-based minerals exploration and development company Alara Resources Limited (ASX: AUQ ) and its Chilean JV partners are pleased to confirm that drilling has now commenced at the El Quillay Copper Gold Project in Chile[i] .

Alara has appointed Juan Carlos Toro Taylor as General Manager (based in Chile) with considerable previous experience with Codelco, the largest copper producer in the world.

El Quillay SpA, the operating company created to manage the El Quillay Project, commissioned a ground IP geophysical survey aimed at confirming existing drill targets (determined on the basis of mineralised outcrops and geological evidence) as well as identifying additional sulphide target areas.

The IP ground survey was completed in February 2012 by Zonge Ingenieria y Geofisica (Chile) S.A and identified a number of important sulphide targets which will be drill tested during the upcoming drilling programme.

Following a detailed bid process involving three short-listed drilling contractors, El Quillay SpA appointed local drilling company DV Drilling E.I.R.L. to conduct a two-stage drilling programme totalling 10,000m of RC and HQ core drilling.

Following completion of initial drill pads, diamond drilling at El Quillay has now commenced.

Alara will continue to keep the market updated on El Quillay as drilling progresses.

FURTHER INFORMATION:

Shanker Madan Managing Director T | (08) 9214 9787 E | smadan@alararesources.com

i Refer Alara market announcement dated 24 October 2011 and entitled “Project Acquisition – El Quillay Copper Gold Project in Chile”

Page 1 of 1