ALARA RESOURCES LIMITED — Interim / Quarterly Report 2011

Jul 31, 2011

Alara Resources Limited Telephone | +61 8 9214 9787 A.B.N. 27 122 892 719 Facsimile | +61 8 9322 1515 Level 14, The Forrest Centre Web | www.alararesources.com 221 St Georges Terrace Email | info@alararesources.com Perth Western Australia 6000

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30 JUNE 2011 QUARTERLY REPORT

CONTENTS

Company Profile ............................................. 2 Project Location ............................................. 3 Company Projects: Khnaiguiyah Zinc Copper Project ................ 5 Daris Copper Gold Project .......................... 11 El Quillay Copper Gold Project ................... 15 Marjan Precious and Base Metals Project . 16 Awtad Copper Gold Project ........................ 17 Corporate ...................................................... 19 Mineral Concessions ................................... 21 Securities Information ................................. 23 Appendix 5B Mining Exploration Entity Quarterly Report................................ 25

SUMMARY

 Cash Position:

Cash (and investments in listed securities) position was $32.2m as at 30 June 2011 (31 March 2011: $8.1m).

Capital Raising (84m Share Placement Raising $30.24m):



2 June 2011 – Completion of Tranche 2 $23.76m share placement of 66m shares at $0.36 per share (after receipt of shareholder approval at general meeting held on 26 May 2011).

20 April 2011 – Completion of Tranche 1 $6.4m share placement of 18m shares at $0.36 per share to a range of sophisticated, professional and other institutional clients of Petra Capital Pty Ltd.

Khnaiguiyah Zinc Copper Project in Saudi Arabia:



29 July 2011 – Assay results from recently completed drill-holes testing extent of mineralisation along the eastern margin of Zone 2 indicate high grade mineralisation, confirming potential for copper with the zinc mineralisation. Furthermore, Zone 2 composite preliminary test work results completed by the Company at the Ammtec laboratories in Perth indicate plus 90% zinc and copper recoveries at a 106 micron primary grind size compared with historical test work indicating a 77% zinc recovery and a 56% copper recovery at a 75 micron primary grind size.

29 June 2011 – Five drilling rigs operating, comprising four diamond drill rigs and one reverse circulation percussion (RC) rig.

16 June 2011 – High-grade mineralisation intersected in Khnaiguiyah metallurgical drill holes.

Daris Copper Gold Project in Oman:



29 June 2011 – 3 diamond core rigs drilling at Daris East and a VTEM target.

21 June 2011 – Drilling has expanded sulphide mineralisation approximately from 120m to 270m strike distance and established its strike and dip extension additionally to the east.

Detail predictive modelling of all available data including the latest VTEM survey has identified 26 very high priority targets with the same probability of success as existing mines and occurrences in the Daris and the adjoining Awtad areas.

Dated: 31 July 2011

FURTHER INFORMATION:

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

Marjan Project (Saudi Arabia):



18 April 2011 – Alara has secured a 50% interest in the Marjan Project comprising 3 EL’s (260km[2] ) prospective for gold, silver, copper and zinc, located within trucking distance ~30km south south-west of the Khnaiguiyah Project. Historical drilling has returned values up to 7g/t Au, 31.3 g/t Ag, 4.7% Zn, and 1.6% Pb over 3m and grab samples have returned values of up to 0.7% Cu, 22.4% Zn, 100g/t Ag , 2.18g/t Au and 5.4% Pb.

 Awtad Project (Oman):

27 April 2011 – Alara has secured an interest (right to earn-in up to 70%) in the Awtad Copper-Gold Project comprising a concession (497km[2] ) located immediately adjacent to the Daris Project concession. The project contains a known occurrence of copper mineralisation based upon previous exploration and Alara is targeting Cyprus type VMS deposits in close proximity to known deposits.

 El Quillay Copper-Gold Project in Chile:

Alara and the Vendors are progressing towards the execution of more definitive joint venture agreements; this is expected to be concluded in September 2011.

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ASX Code | AUQ

COMPANY PROFILE

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Alara Resources Limited (ASX Code: AUQ) is an Australian-based minerals exploration and development company. Alara has a current portfolio of projects in Saudi Arabia, Oman and Chile as follows:

PROJECTS	PROJECTS	**LOCATION **	STATUS
(1)	Khnaiguiyah Zinc-Copper1	Saudi Arabia	Development to BFS
(2)	Daris Copper-Gold2	Oman	Exploration
(3)	El Quillay Copper-Gold3	Chile	Exploration
(4)	Marjan Precious and Base Metals4	Saudi Arabia	Exploration
(5)	Awtad CopperGoldProject5	Oman	Exploration

Alara is moving towards establishing itself as a base metals development company with a strong pipeline of advanced and early stage projects:

Design/ Exploration Feasibility Production Construction Historical non‐JORC code compliant estimated Saudi Arabia: Khnaiguiyah mineralisation as reported in ASX market Zinc – Copper (Alara 50%). announcement dated 5 October 2010 : “Project • Feasibility studies completed. Acquisition ‐ Khnaiguiyah Zinc Copper Project in • JORC drilling and DFS underway. Saudi Arabia” • DFS to be completed Q1 2012. Oman: Daris • Oxide and sulphide copper‐gold mineralisation reported in historic drilling Copper‐Gold (Alara 50‐70+%). has been confirmed . • Preliminary drilling by Alara (25 holes) points to copper • Massive sulphide deposits have been intersected in the current round of drilling. Deposit still open at depth and further west . • Potential for early production.sulphide and oxide mineralisation at shallow depths. •• Further drilling programme planned based on VTEMsurvey results.Planning for ground geophysical surveys Oman: Awtad • Geological mapping and geochemical sampling. Copper‐Gold (Alara 51‐70+%). • Ground geophysics. • Adjacent to Daris concession. • Drill targets identified from VTEM survey. Saudi Arabia: Marjan Gold‐Silver‐Zinc‐Copper (Alara 50%). • Historical drilling shows prospectivity for gold, silver, Programme of trenching and geophysical surveys planned. zinc, copper. Chile: El Quillay Copper‐Gold (Alara 70%). Planning for mapping and geophysics survey during • Extensive surface and old mine working sampling 2011, followed by10,000m drilling. points to the presence of a significant copper system target potential .

1 Refer Alara market announcements dated 5 October 2010 and entitled “Project Acquisition - Khnaiguiyah Zinc Copper Project in Saudi Arabia” and dated 25 October 2010 and entitled “Execution of Joint Venture Agreement - Khnaiguiyah Zinc Copper Project in Saudi Arabia”

2 Refer Alara market announcements dated 30 August 2010 and entitled “Project Acquisition - Daris Copper Project in Oman”

3 – Refer Alara market announcement dated 25 August 2010 and entitled “Project Acquisition El Quillay Copper Gold Project in Chile”

4 Refer Alara market announcement dated 18 April 2011 and entitled “Acquisition of Interest in Marjan Project in Saudi Arabia”

5 Refer Alara market announcement dated 27 April 2011 and entitled “Project Acquisition- Awtad Copper-Gold Project in Oman”

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PROJECT LOCATION

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SAUDI ARABIA

The Khnaiguiyah Zinc Copper Project (Alara 50%) is located adjacent to a bitumen road ~170km west of Riyadh, the capital of Saudi Arabia near the major Riyadh to Jeddah highway. The project comprises the Khnaiguiyah Mining Licence, 3 Exploration Licences and 5 Exploration Licence applications pending grant, totalling ~380km[2] . Alara has a 50% interest in a new joint venture company, “Khnaiguiyah for Mining Company”, which will hold these mineral licences (after transfers have been processed by relevant authorities).

The Marjan Precious and Base Metals Project (Alara 50%) is located ~30km south south-west of the Khnaiguiyah Project. The project comprising 3 Exploration Licences (totalling 260km[2] ) prospective for gold, silver, copper and zinc. Alara will have a 50% interest in a new joint venture company to be formed, which will hold these licences (after Alara has completed a minimum US$1 million funding and transfers have been processed by relevant authorities).

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Figure 1

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OMAN

The Daris Copper Gold Project is located ~150km west of Muscat, the capital of Oman and comprises a mineral excavation licence of ~587km[2] . Alara has a 50% interest (with a right to increase this to 70%+) in a joint venture company, Daris Resources LLC, which holds the exclusive right to manage, operate and commercially exploit the exploration licence.

The Awtad Copper Gold Project is located immediately adjacent to the Daris Project and comprises a mineral excavation licence of ~497km[2] . Alara will have an initial 10% interest (with a right to increase this to 70%+) in the concession owner, Awtad Copper LLC.

Alara has also formed a separate joint venture company (Alara 70%) in Oman, Alara Resources LLC, which has lodged an application for an exploration licence and is in the process of filing applications over several other prospects.

Figure 2

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PROJECT LOCATION

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CHILE

The El Quillay CopperGold Project (Alara - right to earn-in 70%) is located south of the town of El Quillay, ~350km north of Santiago, the capital of Chile.

The project comprises 68 mineral concessions totalling ~15km[2] across four sub-project areas (El Quillay (North, Central and South prospects), Lana-Corina, Vaca Muerta and La Florida) located within a radius of ~10km.

Figure 3

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COMPANY PROJECTS

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1. Khnaiguiyah Zinc Copper Project (Saudi Arabia)

(Alara - 50%, United Arabian Mining Company ( Manajem ) - 50%, of Khnaiguiyah for Mining Company LLC ( KMC ))

Background

Alara has a 50% interest in the advanced Khnaiguiyah Zinc-Copper Project located in Saudi Arabia via a 50% shareholding interest in a newly formed joint venture company, “Khnaiguiyah for Mining Company” ( KMC ).

The Khnaiguiyah Project is an advanced near production project having a historical non–JORC Code compliant estimated mineralisation[6] assessed by BRGM[7] , the French Office of Geological and Mining Research, prepared for the Saudi Arabian Directorate General of Mineral Resources, in 1993 as reported in Alara’s ASX market announcement dated 5 October 2010 and entitled “Project Acquisition - Khnaiguiyah Zinc Copper Project in Saudi Arabia” (a copy of which is reproduced at pages 10 to 23 of Alara’s 2010 Annual Report).

The Project is located 200 km west of Riyadh and is the second most advanced base metals project in Saudi Arabia after the Jabal Sayid Copper-Gold Project, previously held by Citadel Resources Group Limited (ASX: CGG), which was taken over by Equinox Minerals Limited (TSX and ASX: EQN) in January 2011, which itself was taken over by Barrick Gold Corporation (TSX and NYSE: ABX) in July 2011.

Previous drilling (of in excess of 45,000 metres in ~345 RC and diamond drill holes) at Khnaiguiyah by BRGM and Ma’aden has outlined a substantial Zn-Cu mineralisation in two zones - Zone 2 and Zone 3 - and significant additional mineralisation in Zone 1 and Zone 4 (refer Figure 1).

The key terms of the Shareholders’ Agreement (dated 21 October 2010) between Alara and “Manajem” (the Vendor) are outlined in Alara’s ASX market announcement dated 25 October 2010 and entitled “Execution of - Joint Venture Agreement Khnaiguiyah Zinc Copper Project in Saudi Arabia” and in Alara’s 2010 Annual Report, at page 8.

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Figure 4: Khnaiguiyah Project Location, Licence Areas and Mineralised Zones

6 Source: BRGM Geoscientists, 1993, Khnaiguiyah zinc-copper deposit – prefeasibility study – 1,2, and 3: Saudi Arabian Directorate General of Mineral Resources Technical BRGM-TR-13-4, 651p., 209 figs., 171 tables, 78 appendixes, 23 photoplates

7 Bureau de Recherches Géologiques et Minières (‘’Office of Geological and Mining Research’’) (www.brgm.fr)

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Drilling Programme

Five drilling rigs – four diamond core rigs and one reverse circulation (RC) rig are presently drilling at the Khnaiguiyah Project (working two shifts a day).

To date, a total of 53 holes for ~6500m of drilling have been completed. This included all planned metallurgical test work holes, geotechnical holes, 20 mineralisation validation holes and approximately 16 holes to extend the known mineralisation. Contracts for a total 35,000m of drilling have been awarded.

Assay results for around 250 samples have been received to date. Approximately 500 additional samples including validation samples are in the lab systems at ALS in Jeddah and Europe for analysis. As the results of these samples are received, collated and analysed, further information will be provided to the market.

The main focus of drilling activity in the next quarter will be extension of known mineralisation and sterilisation of the proposed plant and tailings dam areas.

Key areas for proposed extension of mineralisation are:

• South of Zone 3, where the Company has announced the following diamond core drilling results[8] :

• K3DD11_006: 48m at 5.84% Zn from 44m including a zone of 4m at 26% Zn from 85m 10m at 12.99% Zn from 83m

  • (includes highest recorded assay of 1m at 43.6% Zn from 87m)

• K3DD11_007: 5m at 6.58% Zn from 37m including a zone of 4m at 7.56% Zn 10m at 0.6% Cu from 41m including a zone of 3m at 1.01% Cu

• Eastern margin of Zone 2 where discontinuous patches of copper mineralisation have been observed in historic drill holes and with recent diamond core drilling results as follows[9] :

• K2DD11_011: 10m at 5.00% Zn from 25m to 35m with 16m at 1.16% Cu from 25m

 K2DD11_013: 7m at 6.46% Zn from 41 to 48m with 12m at 0.99% Cu from 47m

• K2DD11_014: 7m at 7.16% Zn from 50m to 57m with 6m at 0.86% Cu from 55m

• K2DD11_010: 5m at 3.03% Zn from 57m to 62m with 5m at 1.24% Cu from 62m

Refer Figures 5 and 6 for drill-hole locations within Mineralised Zones 2 and 3.

The Company recently obtained the full historic database of BRGM from Manajem covering an area of approximately 49km[2] around the Khnaiguiyah deposit.

During the next quarter, the Company will review this database to outline drilling targets and expand its search for mineralisation in this area. Many old workings in the vicinity of the Project area remain to be drilled.

Water rights, procurement of land around the mine, rail access for transport of concentrate, transfer of the mining licence (from Manajem to KMC) and environmental approval remain major challenges for the next three months.

Extension of Zone 2 to the north has been somewhat mixed but mainly disappointing in respect of zinc. We have had outstanding success in extending Zone 3 to the south east towards Zone 4. A 60m high grade zone was intersected a further 50m south of the previous extension hole two days ago. It is expected to continue further to the south. This last lot of drilling results will come through in August.

A steady flow of drill results and update on the DFS may be expected from the first week of August.

8 - Refer Alara market announcement dated 26 May 2011 and entitled “Drilling Update Khnaiguiyah Zinc Copper Project, Saudi Arabia”

9 - Refer Alara market announcement dated 29 July 2011 and entitled “Drilling and Metallurgical Test Work Update Khnaiguiyah Zinc Copper Project Saudi Arabia”

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Figure 5: Zone 2 Drill Hole Locations

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Figure 6: Zone 3 Drill Hole Locations
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Definitive Feasibility Study (DFS)

On 16 June 2011, the Company announced the full complement of Engineering and Management teams working on the DFS at the Khnaiguiyah Project.[10]

The Engineering team working on the DFS comprises the following members:

• Ausenco Limited (ASX: AAX), a well-known worldwide minerals consulting and engineering design and construction group, have been appointed as the “Lead Engineers” to lead the DFS;

• CSA Global, a global mining industry consultancy, have been appointed with responsibility for data management, geology modelling, resource estimation, geotechnical, mining studies and pit optimisation;

• SMEC, an Australian Professional Consulting Engineering Group, specialising with over 4000 employees worldwide have been engaged to conduct Environmental and Social Studies in conjunction with several Saudi Arabian consulting groups and university academics, assisting on water resources, legal framework, fauna, flora, air, noise, soil, social and archaeological surveys; and

• Mike Efthymiou, a consultant with extensive experience on the Jabal Sayid Copper-Gold Project in Saudi Arabia and with zinc and copper producer, Jabiru Metals in Australia and previously as Group Metallurgist, Western Mining Corporation, is managing the design and supervision of the metallurgical test work at Ammtec laboratories in Perth, Western Australia.

The Management team comprises the following personnel:

• Eduardo Valenzuela, General Manager, Projects, is supervising the DFS, based in Perth. Eduardo is a mining engineer holding a Master of Business Administration degree and with over 30 years’ experience in mine operations, project management and project financing covering most key mineral commodities including copper, nickel and gold. His management experience includes senior roles such as mining manager at the Murrin Murrin Nickel operations in WA, technical director with Sundance Resources, senior project manager with SKM, industry specialist with the International Finance Corporation in Washington DC, project manager and strategic planning manager at Escondida in Chile, manager Latin America with BHP Engineering in Chile, and manager mining services with BHP in Western Australia.

• Mohammed Fazle Haq was appointed Project Manager, based in Riyadh, in April 2011. He has a M.Sc. in Geology and a postgraduate degree in Environmental Geology from Cardiff in the UK and 25 years’ experience in Saudi Arabia. He brings considerable personal experience of the Khnaiguiyah deposit having led the Manajem Feasibility Study on the Project from 2006 to 2009.

• Sohan Singh Rathore was appointed Technical Advisor, based in Riyadh, in July 2011. He is a mining engineer and ex-Vedanta General Manager of Operations at Hindustan Zinc in India and Australian Country Manager and Head of Copper Mines of Australia and the Thalanga Copper Mine in Queensland, Australia.

• Mel Campbell joined the Management Team of Alara as Chief Financial Officer (CFO) in April 2011. He was previously with Robe River and was Group Finance Manager with Troy Resources with extensive project delivery experience in Australia, West Africa, Brazil, Argentina and Chile.

• Ganesh Krishnamurthy was promoted to the role of General Manager Exploration based in the Middle East with accountability for Alara’s projects in Saudi Arabia and Oman. He has several years’ previous experience in Oman and with Rio Tinto in Australia.

• Bader Al Marshad has assumed the role of Manager, Permitting and Government Relations with KMC. He is a Saudi Arabian national with considerable experience in Permitting and Government Relations.

• Asim Chaudhri has joined KMC as Corporate Services Manager. He is a UK national with an MBA and experience in Project Management.

10 Refer Alara market announcement dated 16 June 2011 and entitled “Operations Update - Khnaiguiyah Project”

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During the quarter, the Company appointed eight consultant teams assisting with environmental study on various aspects of social, legal, fauna, flora, archaeological, water table measurements, air and noise data collection and three teams of drilling contractors operating five drilling rigs commenced work at Khnaiguiyah.

This will increase to a total of 16 separate teams when geophysical survey to validate previously identified aquifer, water drilling, tailings dam, geotechnical logging and testing, pit dewatering and geophysical survey for water commence work on site in early August.

Staffing and managing the quantum of work within the nine months since of first signing of the agreement has been quite a challenge. Throughout this process Manajem, Alara’s 50% Saudi Joint Venture partner in KMC, has been exceptionally helpful.

Metallurgical Test Work Programme:

During the quarter, approximately seven tonnes of PQ diamond core was airfreighted to Perth for metallurgical test work. This comprised a total of five diamond PQ drill core holes in Zone 2 and a further five diamond PQ drill holes in Zone 3, representing various rock types and grades of mineralisation.

All of the drill core for these drill holes has now been delivered to the Ammtec Laboratories in Perth for the test work programme. Test work commenced in May and is making steady progress.

Initial composite sample from Zone 2 from four metallurgical drill holes was selected to represent the average copper and zinc grades of the mineralisation in Zone 2. Open circuit flotation test work on this composite is continuing. Preliminary flotation results indicate excellent copper and zinc recovery rates, exceeding historical test work completed by BRGM (with respect to the prefeasibility study completed by them) and by Manajem (with respect to the feasibility study completed by them).

Zone 2 composite preliminary test work results completed by the Company at the Ammtec laboratories in Perth indicate plus 90% zinc and copper recoveries at a 106 micron primary grind size compared with historical test work indicating a 77% zinc recovery and a 56% copper recovery at a 75 micron primary grind size.

Zone 2 composite is continuing in open circuit; it is anticipated that an LCT locked cycle flotation test will be completed in early August. An LCT is considered definitive metallurgical response and can provide design criteria which would then be handed over to DFS lead engineers, Ausenco Limited, to be used for sizing the flotation plant for the Khnaiguiyah Project.

Similar tests on Zone 3 as well as variability and optimisation test work on representative blends from both Zones will continue for the next two months. Further updates will be provided as and when results become available.

Four alternative tailing dam sites have been identified one of which has been selected for a sterilisation drilling programme.

Two plant locations are being investigated – sterilisation drilling on one will commence in the next quarter. The favoured site is located between Zone 2 and Zone 3.

Water sites were selected for geophysical investigation and drilling during the quarter.

Next Steps

Alara’s focus over Q3 2011 will be to work closely with Manajem within KMC to progress the following matters:

• Receive reports from sub-consultants/firms undertaking various aspects of the DFS;

• Continuation of the initial drilling programme of 6,500 metres;

• Compilation of various data to convert the historical estimates to a JORC compliant status and to expand the existing and known mineralisation;

• The transfer of the Khnaiguiyah Mining Licence (and other Project exploration licences) from Manajem to KMC; and

• Receive Environmental Permit for the mining operations at Khnaiguiyah.

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Alara’s indicative development work programme for the next 12 months is illustrated below:

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2. Daris Copper-Gold Project (Oman)

(Alara - 50% with right to increase to 70%+, Al Tamman Trading Establishment LLC - 50%, of Daris Resources LLC))

Alara has a 50% interest (with a right to increase this to 70%+) in the Daris Copper-Gold Project located in Oman, via an initial 50% shareholding interest in a newly formed joint venture company, Daris Resources LLC, which holds the exclusive right to manage, operate and commercially exploit the exploration licence.

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Copper
deposit
Copper
Smelter
Alara
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Figure 7: Daris Copper Project Location

Please refer to Alara’s 2010 Annual Report, at pages 28 to 31, for further technical information on the Daris Project.

The key terms of the Shareholders’ Agreement (dated 28 August 2010) between Alara and Al Tamman Trading Establishment LLC ( ATTE ) (the Vendor) were outlined in Alara’s market announcements dated 30 August 2010 and entitled “Project Acquisition - Daris Copper Project in Oman” and are also in Alara’s 2010 Annual Report, at page 32.

Exploration and Drilling Programme

A total of 1,832m in 16 holes (two in progress) at Daris East since commencement of drilling March 2011 to 20 July.

An additional 630m in seven holes have been proposed to be drilled at Daris East.

At Daris 3A-5, 160m in two holes have been proposed to drill the strike extension of previously intersected massive sulphides - one to the north of DEDC003 and one to the south of DEDC001.

26 high priority targets have been identified through predictive modelling at Daris and the adjoining Awtad area using GIS referenced spatial layers of all available geological and geophysical data. These targets have similar probability of success as the known copper occurrences in the region.

Daris (Block 7) and Awtad (Block 8) together cover a total of more than 1000 sq km area. The areas cover more than 40kms strike length of the Semali Ophiolite belt considered highly prospective for Cyprus type VMS copper – gold deposits.

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To date, mineralisation has been confirmed by drilling at the following two prospects:

• Daris East prospect - 21 rotary and 3 diamond core holes were drilled to test shallow oxide mineralisation for a potential heap leach operation and to locate massive sulphide zones beneath the oxide cap; and

• Daris 3A-5 prospect (located ~10 kilometres north-west of Daris East) - 3 diamond core holes were drilled to test shallow sulphide mineralisation around a known gossan, based upon government-funded exploration work conducted by various agencies over the past 30 years.

Highlights of the initial drilling programme on these two prospects are summarised as follows:

• 17.20m at 8.05% copper, as copper sulphides and 2.67 g/t gold, from 51.50m including several intersections between 10% to 14.7% copper (D3DC003)

• 11.90m at 5.74% copper, as copper sulphides from 34.35m (D3DC002)

• 3.45m at 10.28% copper (including 1m at 16.0% copper), as copper sulphides from 50.60m (D3DC002)

• 17.85m at 2.61 g/t gold from 28.40m (D3DC002)

• 3.45m at 3.10 g/t gold from 50.60m (D3DC002)

• 6.10m at 5.81% copper, as copper sulphides from 31.55m (D3DC001)

• 18.65m at 3.80 g/t gold from 19.0m(D3DC001)

• 4m at 5.33% copper as copper sulphides and 0.41g/t gold from 34m including 1m at 6.46% copper from 34m; 7m at 2.45% copper as copper sulphides and 0.25g/t Gold from 38m (DERO009)

• 23m at 1.23% copper as copper oxide from 7m, including 1m at 2.7% copper from 17m (DERO006)

• 8m at 1.26% copper as copper oxide from 28m; 8m at 2.88g/t gold from 1m, including 1m at 12.4 g/t from 4m (DERO004)

A second phase program of 1000m of diamond HQ holes was commenced in March 2011.

On 19 April 2011, Alara announced the completion of four diamond core drill holes with massive sulphide mineralisation ranging in thickness from 2.85m to 7.25m intersected in three (DEDC005, DEDC006 and DEDC007) of the four completed drill holes confirming the westward continuity of the mineralised zone over 160m and still open to the west.

A summary of the copper assay results for these three core drill holes at the Daris East prospect are:

• 7.25m at 4.08% copper as copper sulphides from 49.95m in DEDC005

• 4.4m at 2.02% copper as copper sulphides from 51.6m in DEDC006

• 2.85m at 4.55% copper as copper sulphides from 30.65m in DEDC007

During the June 2011 quarter a total of 1,832m in 16 holes were drilled on Daris East and a VTEM target.

Refer to Figure 8 for the drill hole locations at the Daris East prospect.

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Figure 8: Daris East Drill Hole Locations

VTEM Electromagnetic Survey, Predictive Modelling and Exploration

Alara completed (in March 2011) a helicopter-borne electromagnetic VTEM survey covering prospective areas within the Daris Project, including areas with high grade copper and copper gold intersections (from the initial drilling programme) reported within the Daris 3A-5 and Daris East prospects.

The VTEM survey is a geophysical technique appropriate for the region for locating volcanogenic massive sulphide ( VMS ) style of mineralisation. The electromagnetic and magnetic geophysical survey of ~1203 line kilometres was completed by Geotech Airborne Malta Limited.

During the June 2011 quarter Alara received a detailed interpretation of the VTEM data and also commenced drilling on one of the targets. To date 1 drill hole has been drilled on the target. Minor sulphide mineralisation was intersected in this drill hole. .

In this quarter the Company also initiated detailed predictive modelling of all GIS referenced spatial geological, geochemical and geophysical data sets including the past and the recent VTEM survey.

Predictive modelling based on known copper occurrences and mines in the region has outlined 26 very high priority targets with similar probability of success as the known occurrences.

Additionally 15sq km area was determined to be highly prospective for VMS mineralisation. Most of these areas are covered by a thin mantle of recent marine terraces and has been difficult to explore.

In addition to drilling at Daris East and Daris 3A-5, and the 26 identified targets it is proposed to cover the 15 sq km areas with a programme of RAB drilling to sample the unconformity at the interface of the Ophiolitic rocks and the mantle of recent sediments.

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Figure 9: Map of high prospectivity targets (>0.83) in the study area in red in relation to historic mines and development projects showing block outlines

Daris Resources LLC Joint Venture Shareholders’ Agreement

The Daris Resources LLC shareholders’ agreement[11] is subject to conditions precedent to be satisfied or waived by Alara on or before 27 August 2011), including, amongst other matters, the incorporation of Daris Resources LLC (which has occurred), the execution of the management agreement and ancillary loan agreement (which is expected to be executed within Q3 2011) and the concession being renewed with mineral rights expanded from copper to include gold, silver and other base metals. As at the date of this report, the conditions precedent have not been satisfied.

Alara Resources LLC Joint Venture Shareholders’ Agreement

Alara has also formed a new joint venture company (“Alara Resources LLC” ( AlaraCo )) with Sur United International Co. LLC ( SUR ), to identify, secure and commercially exploit other resource projects in Oman. During Q4 2010, AlaraCo has lodged an application for an exploration licence and is in the process of filing applications over several other prospects.

The Alara Resources LLC shareholders agreement[12] is subject to conditions precedent to be satisfied or waived by Alara on or before 7 August 2011), including the incorporation of AlaraCo (which has occurred), the execution of an ancillary loan agreement (which is expected to be executed within Q3 2011) and an exploration license being granted to AlaraCo. As at the date of this report, the conditions precedent have not been satisfied. Alara will secure a further extension of the date for completion of the conditions precedent until such time as an exploration license has been granted to AlaraCo.

11 Refer Alara market announcements dated 30 August 2010 and entitled “Project Acquisition - Daris Copper Project in Oman”

12 Refer Alara market announcements dated 30 August 2010 and entitled “Project Acquisition - Daris Copper Project in Oman”

JUNE 2011 QUARTERLY REPORT | 14

COMPANY PROJECTS

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3. El Quillay Copper-Gold Project (Chile)

(Alara - right to earn-in 70%)

In August 2010, Alara secured rights to acquire (subject to completion of due diligence) a 70% interest in the El Quillay Copper-Gold Project located in the north of Chile.

The project, which comprises 4 project areas (El Quillay (North, Central and South prospects), Lana-Corina, Vaca Muerta and La Florida), presents several drill targets:

• El Quillay Norte (North) - Copper prospect along the El Quillay regional fault zone (which has a recent decline);

• El Quillay Central – Copper prospect along the El Quillay fault zone;

• El Quillay Sue (South) – Coppergold prospect along the regional fault zone;

• Lana-Corina – Two breccia pipes 40m to 50m wide with a deep shaft and underground workings. The breccia pipes extend into a porphyry copper deposit where 2 holes have intersected greater than 130m of mineralisation, one of which intersected 180m of 0.70% Cu and up to 200ppm Mo;

• Vaca Muerta – along the El Quillay regional fault zone with many workings in parallel near vertical structures with grades encountered from due diligence sampling of up to 3.8% Cu over 2m; and

• La Florida – exploration potential along the El Quillay regional fault zone.

Figure 10: El Quillay Project Location

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Please refer to Alara’s 2010 Annual Report, at pages 24 to 27, for further technical information on the El Quillay Projects.

The key terms of the term sheet (dated 17 August 2010) executed with Chilean vendors, Inversiones EM DOS Limitada and Mr Miguel Nenadovich del Río (the Vendors), were outlined in an Alara market announcement dated 25 August 2010 and entitled “Project Acquisition – El Quillay Copper Gold Project in Chile” and are also in Alara’s 2010 Annual Report, at page 27.

Alara’s legal due diligence investigations are on-going and the parties are progressing towards the execution of the more definitive joint venture agreements. The timetable for completion of these matters has been extended by mutual agreement of the parties to 25 August 2011.

The agreements with the Chilean vendors are expected be finalised in mid-August 2011. No field work is proposed until these agreements are executed.

JUNE 2011 QUARTERLY REPORT | 15

COMPANY PROJECTS

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4. Marjan Project (Saudi Arabia)

(Alara - 50%, United Arabian Mining Company ( Manajem ) - 50%, of “Marjan Mining Company LLC” ( MMC ) (to be incorporated))

In April 2011, Alara secured a 50% interest in the Marjan Project in Saudi Arabia.[ 13]

Project Summary

• Comprises 3 Exploration Licences of approximately 260km[2] located within trucking distance approximately 30kms south south-west of Alara’s flagship Khnaiguiyah Zinc Copper Project, as illustrated in Figure 11

• Predominantly gold prospect with associated silver, zinc and copper

• Historical drilling in the Marjan Project area has returned values up to 7g/t Au, 31.3 g/t Ag, 4.7% Zn, and 1.6% Pb over 3m

• Grab samples from the Marjan Project area have returned values of up to 0.7% Cu, 22.4% Zn, 100g/t Ag , 2.18g/t Au and 5.4% Pb

• Alara proposes to conduct a programme of trenching and trench sampling to expand on the previous surface sampling, conduct ground geophysical surveys and drilling to outline a resource in the project area

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Figure 11: Marjan Licence Locations Adjacent to Khnaiguiyah Project

Joint Venture Agreement

The key terms of the Shareholders Agreement (dated 17 April 2011)) executed with Saudi Arabian vendor, Manajem, were outlined in an Alara market announcement dated 18 April 2011 and entitled “Acquisition of Interest in Marjan Project in Saudi Arabia” and are also in Alara’s March 2011 Quarterly Report.

13 Refer Alara market announcement dated 18 April 2011 and entitled “Acquisition of Interest in Marjan Project in Saudi Arabia”

JUNE 2011 QUARTERLY REPORT | 16

COMPANY PROJECTS

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The shareholders’ agreement is subject to conditions precedent (to be satisfied or waived by Alara on or before 16 October 2011), including, amongst other matters, the incorporation and registration of a new joint venture company and the execution of ancillary agreements arising therein. As at the date of this report, the conditions precedent have not been satisfied.

5. Awtad Copper-Gold Project (Oman)

(Alara - 10% initially with right to increase to 51% and subsequently to 70%+, existing local shareholders - the balance of shareholding interests, of Awtad Copper LLC))

In April 2011, Alara secured rights to earn-in up to a 70% interest in the Awtad Copper-Gold Project located in Oman.[ 14]

Project Summary

• The Licence Area No. 8 (Block 8) of ~49,667 hectares comprising the Awtad Project is located immediately adjacent to the Licence Area No. 7 (Block 7) comprising the Daris Copper-Gold Project in which Alara has an interest (refer Figure 12)

• Alara is targeting Cyprus type VMS deposits in close proximity to known deposits. The VMS prospectivity model of Block 8 has identified five target areas along the strike extension of known copper occurrences

• The first priority target area of ~15 kms[2] is located immediately adjoining the Daris “Block 7” Project to the west where Alara has previously announced significant copper and gold mineralisation at the Daris 3A-5 and Daris East prospects

• The Awtad Project area is ~120km by paved highway from an operating copper concentrator and smelter in Sohar

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Figure 12: Awtad “Block 8” Project Location Adjacent to Daris “Block 7” Project

14 - - Refer Alara market announcement dated 27 April 2011 and entitled “Project Acquisition Awtad Copper Gold Project in Oman

JUNE 2011 QUARTERLY REPORT | 17

COMPANY PROJECTS

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Joint Venture Agreement

The key terms of the Shareholders Agreement (dated 24 April 2011)) executed with the Omani vendors were - - outlined in an Alara market announcement dated 27 April 2011 and entitled “Project Acquisition Awtad Copper Gold Project in Oman” and are also in Alara’s March 2011 Quarterly Report.

On 29 July 2011, the conditions precedent under the shareholders’ agreement were declared by Alara to be satisfied or waived (where applicable).

NOTES:

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves has been compiled by Mr Hem Shanker Madan who is a Member of The Australian Institute of Mining and Metallurgy. Mr Madan is the Managing Director of Alara Resources Limited. Mr Madan has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code).” Mr Madan consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

JUNE 2011 QUARTERLY REPORT | 18

CORPORATE

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Changes Within the Board

On 16 May 2011, the Company announced the appointment of Ian Williams AO as Chairman of Alara. Ian has considerable experience in the development and operation of large scale base metal mining operations, including responsibility for the development and commissioning of the world class Century lead/ zinc mine in north western Queensland. Ian joined the Alara Board in November 2010 as a Non-Executive Director.

In addition, Executive Directors Farooq Khan and William Johnson have transitioned to become Non-Executive Directors of Alara. As a consequence, the Board of Alara is now structured with a majority of Non-Executive Directors as follows:

Ian Williams AO Non-Executive Chairman and Chairman of the Remuneration and Nomination Committee Shanker Madan Managing Director Doug Stewart Non-Executive Director and Chairman of the Audit Committee Farooq Khan Non-Executive Director William Johnson Non-Executive Director

Farooq Khan and William Johnson will contribute strategic and corporate advice and services to Alara on a part time basis (in addition to their duties as Non-Executive Directors).

Cash Position and Listed Securities

The Alara group’s cash (and investments in listed securities) position as at 30 June 2011 was $32.2 million (31 March 2011: $8.1 million).

As at 30 June 2011, Alara’s investment in listed securities had a total value of $0.9 million (31 March 2010: $1.3 million).

Completion $30.24 Million / 84 Million Shares Capital Raising

Alara announced on 14 April 2011[15] that it had undertaken a placement of 84 million shares at $0.36 per share to raise a total of $30.24 million ( Placement ). The Placement was managed by Petra Capital Pty Ltd ( Petra Capital ) and was accepted by sophisticated, professional and other institutional investors. Petra Capital received a commission on the gross funds raised under the Placement.

The new shares issued under the Placement comprise two tranches:

• (1) Tranche 1: 18 million shares (raising $6,480,000 gross) issued on 20 April 2011 within the Company’s 15% placement capacity under ASX Listing Rule 7.1[16] ; and

• (2) Tranche 2: 66 million shares (raising $23,760,000 gross) issued on 2 June 2011 under ASX Listing Rule 7.1[17] following shareholder approval at a General Meeting held on 26 May 2011[18] .

15 Refer Alara market announcement dated 14 April 2011 and entitled “Completion of $30 Million Capital Raising”

16 Refer Alara market announcement dated 21 April 2011 and entitled “Completion of Tranche 1 $6.48 Million Share Placement and Updated Top 20 Shareholders” and ASX Appendix 3B New Issue Announcement lodged on 27 April 2011

17 Refer Alara market announcement dated 3 June 2011 and entitled “Completion of Tranche 2 $23.76M Share Placement and Top 20 Shareholders” and ASX Appendix 3B New Issue Announcement lodged on 3 June 2011

18 Refer Alara Notice of Meeting and Explanatory Statement dated 15 April 2011 and Alara market announcement dated 26 May 2011 and entitled “Results of General Meeting - 26 May 2011”

JUNE 2011 QUARTERLY REPORT | 19

CORPORATE

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Issue of Unlisted Options

During the quarter, the Company issued 250,000 unlisted options to each of Non-Executive Directors, Ian William and Douglas Stewart, after receiving shareholder approval at a general meeting held on 26 May 201119:

No. of Options Issued	Date of Issue	Description of Unlisted Options	Exercise Price	Expiry Date	Vesting Criteria 20
500,000	26 May 2011	$0.60 (25 May 2014) Directors’ Options	$0.60	25 May 2014	100% on date of issue

During the quarter, the Company issued the following unlisted options to Company personnel, as part of their remuneration package21:

No. of Options Issued	Date of Issue	Description of Unlisted Options	Exercise Price	Expiry Date	Vesting Criteria
500,000	26 May 2011	$0.50 (25 May 2014) Options	$0.50	25 May 2014	100% on date of issue
425,000	26 May 2011	$0.60 (25 May 2014) Options	$0.60	25 May 2014	100% on date of issue
425,000	26 May 2011	$0.70 (25 May 2014) Options	$0.70	25 May 2014	100% on date of issue

Corporate Governance Review

On 16 May 2011, the Company announced that it had revised its Corporate Governance Statement and developed a Code of Conduct, both of which can be viewed on the Company’s website, www.alararesources.com.

19 Terms and conditions of issue are set out in a terms and conditions of issue are set out in a Notice of Meeting and Explanatory Statement dated 15 April 2011 for a General Meeting held on 26 May 2011 and in an ASX Appendix 3B New Issue Announcement lodged on 27 May 2011

20 Options which have vested may be exercised at any time thereafter, up to their expiry date

21 Terms and conditions of issue are set out in an ASX Appendix 3B New Issue Announcement lodged on 27 May 2011

JUNE 2011 QUARTERLY REPORT | 20

MINERAL CONCESSIONS

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KHNAIGUIYAH ZINC COPPER PROJECT IN SAUDI ARABIA

The Khnaiguiyah Zinc Copper Project is located adjacent to a bitumen road ~170km west of Riyadh, the capital of Saudi Arabia near the major Riyadh to Jeddah highway. The project comprises one Mining Licence (granted in December 2010), 3 2 Exploration Licences and 5 Exploration Licence applications pending grant totalling ~380km .

Alara Saudi Operations Pty Limited has a 50% interest in a joint venture company, “Khnaiguiyah for Mining Company” (incorporated on 10 January 2011), which will hold these mineral licences (after transfers have been processed by relevant authorities).

Refer to Alara market announcements dated 5 October 2010 and entitled “Project Acquisition - Khnaiguiyah Zinc Copper Project in Saudi Arabia” and dated 25 October 2010 and entitled “Execution of Joint Venture Agreement - Khnaiguiyah Zinc Copper Project in Saudi Arabia.”

Also refer to Alara’s 2010 Annual Report (at page 8) for further information on the Khnaiguiyah Project joint venture terms.

DARIS COPPER-GOLD PROJECT IN OMAN

The Daris Copper Project is located ~150km west of Muscat, the capital of Oman and comprise a mineral excavation licence of ~587km2. Alara Oman Operations Pty Limited has a 50% interest (with a right to increase this to 70%+) in a new joint venture company, Daris Resources LLC (incorporated on 1 December 2010), which holds the exclusive right to manage, operate and commercially exploit the exploration licence.

Alara Oman Operations Pty Limited also has a 70% interest in a separate joint venture company in Oman, Alara Resources LLC (incorporated on 2 October 2010), which has lodged applications for exploration licences over several prospects.

Refer to Alara market announcements dated 30 August 2010 and entitled “Project Acquisition - Daris Copper Project in Oman.”

Also refer to Alara’s 2010 Annual Report (at page 32) for further information on the Daris Resources LLC and Alara Resources LLC joint venture terms.

EL QUILLAY COPPER-GOLD PROJECT IN CHILE

The El Quillay Copper-Gold Project in Chile is located south of the town of El Quillay, ~350km north of Santiago, the capital of Chile. The project comprises 68 mineral concessions totalling ~15km2 across four sub-project areas (El Quillay (North, Central and South prospects), Lana-Corina, Vaca Muerta and La Florida) located within a radius of ~10km.

Alara Chile Operations Pty Ltd and the Vendors have signed a binding term sheet and are progressing towards the execution of the more definitive joint venture agreements.

– Refer to Alara market announcement dated 25 August 2010 and entitled “Project Acquisition El Quillay Copper Gold Project in Chile”.

Also refer to Alara’s 2010 Annual Report (at pages 36 to 37) for further information on the El Quillay joint venture terms.

MARJAN PRECIOUS AND BASE METALS PROJECT IN SAUDI ARABIA

The Marjan Precious and Base Metals Project (Alara 50%) is located ~30km south south-west of the Khnaiguiyah Project. The project comprising 3 Exploration Licences (totalling 260km2) prospective for gold, silver, copper and zinc.

Alara Marjan Operations Pty Limited will have a 50% interest in a new joint venture company to be formed (“Marjan Mining Company” (MMC)), which will hold these licences (after Alara has completed a minimum US$1 million funding and transfers have been processed by relevant authorities).

Refer to Alara market announcement dated 18 April 2011 and entitled “Acquisition of Interest in Marjan Project in Saudi Arabia”.

AWTAD COPPER-GOLD PROJECT IN OMAN

The Awtad Copper Gold Project is located immediately adjacent to the Daris Project and comprises a mineral excavation 2 licence of ~497km .

Alara Oman Operations Pty Limited will have an initial 10% interest (with a right to increase to 51% and subsequently to 70%+) in the concession owner, Awtad Copper LLC.

• • Refer to Alara market announcement dated 27 April 2011 and entitled “Project Acquisition Awtad Copper Gold Project in Oman”.

JUNE 2011 QUARTERLY REPORT | 21

MINERAL CONCESSIONS

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AUSTRALIAN MINERAL TENEMENTS

Project	Status	Tenement	Grant / Application Date	Expiry Date	Area (Blocks)	Area (km²)	Area (hectares)	Location / Property Name	State	Company’s Interest
Bigrlyi South	Granted	EL 24879	15/08/06	14/08/12	54	170	17,000	Mount Doreen	NT	100% (75% held by Alara Operations Pty Ltd and 25% held by Hume Mining NL); Thundelarra Exploration Ltd has a right under a joint venture with Alara to earn a 70% interest 22
	Application	EL 24927	12/09/05	N/A	338	998.7	99,870	Haasts Bluff	NT
	Granted	EL 24928	24/08/06	23/08/12	12	28	2,800	Mount Doreen	NT
	Granted	EL 24929	24/08/06	23/08/12	26	56.8	5,680	Mount Doreen	NT
Canning Well	Granted	E 46/629	02/08/05	21/08/12	19	57	5,700	Canning Well	WA	100% (75% held by Alara Operations Pty Ltd and 25% held by Hume Mining NL); subject to a farm-out agreement with Process Minerals International Pty Ltd, a subsidiary of ASX- listed Mineral Resources Limited 23
	Application	E 46/585	17/10/03	N/A	69	207	20,700	Canning Well	WA	Right to earn 85% (excluding all manganese mineral rights) (63.75% held by Alara Operations Pty Ltd and 21.25% held byHume MiningNL)
	Granted	E46/801	06/09/10	05/09/15	19	60	60,000	Canning Well	WA	100% (Alara Resources Limited)

PERUVIAN MINERAL CONCESSIONS

During the June 2011 quarter, the Company forfeited its Peruvian concessions as it was unable to secure farm-outs in respect of the same and had determined to focus Company management and financial resources on other projects in its portfolio.

The forfeited concessions were as follows:

		Application/Grant	Area	National		**LOCATION **
Concession	Code	Date	(Hectares)	Map	District	Province	Department
Lituania1	01-02481-07	31July2007	600	29-X	Crucero	Carabaya	Puno
Lituania 2	01-02482-07	10 September 2007	1000	29-X	Crucero	Carabaya	Puno
Lituania 3	01-02483-07	25 September 2007	1000	29-X	Crucero	Carabaya	Puno
Lituania 8	10029708	27June2008	500	29-X	Putina	Sn.Antonio dePutina	Puno
Cochacucho1	01-02461-07	5 September 2007	800	28-V	Ituata/Coasa	Carabaya	Puno
Cochacucho2	01-02463-07	31July2007	800	28-V	Coasa/Ituata	Carabaya	Puno
Cochacucho 3	01-02463-07	31 July 2007	800	28-V	Ituata/Coasa	Carabaya	Puno
Lituania4	01-02484-07	5 September 2007	800	29-X	Coasa	Carabaya	Puno

22 Under a joint venture agreement, ASX listed Thundelarra Exploration Ltd (ASX Code: THX) is earning-in a 70% interest in Exploration Licenses EL 24879, EL 24928 and EL 24929 by incurring $750,000 of expenditure on these tenements over a period of 5 years from the date of the agreement on 12 May 2009 and a 70% interest in Exploration License application EL 24927 by incurring $750,000 of expenditure on this tenement over a period of 5 years from the date of grant. Refer Alara market announcement dated 14 May 2010 and entitled “Bigrlyi South Uranium Joint Venture with Thundelarra Exploration”

23 Under an agreement dated March 2010, Process Minerals International Pty Ltd (PMI) will determine the feasibility of a manganese mining operation on the Canning Well Exploration Licence 46/629 tenement. If the operation is feasible, PMI will acquire the manganese rights in the tenement and develop an operation to mine and process manganese from the tenement. Upon commencement of mining, PMI will pay Alara a royalty based on a rate per dry metric tonne of manganese fines and lump mined - subject to variation in accordance with manganese price benchmarks and to the levels of manganese fines and lump produced.

JUNE 2011 QUARTERLY REPORT | 22

SECURITIES INFORMATION as at 28 July 2011

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ISSUED SECURITIES

					Quoted
					**on ASX **	Unlisted	**Total **
Fully paid ordinary shares					210,507,500	-	210,507,500
$0.55 (26 July 2012) Unlisted Options 24					-	500,000	500,000
$0.35 (16 September 2013) Unlisted Options			25		-	16,400,000	16,400,000
$0.35 (16 September 2013) Unlisted Options			25		-	1,000,000	1,000,000
$0.35 (25 October 2014) Unlisted Options		26			-	3,650,000	3,650,000
$0.60 (25 October 2014) Unlisted Options		26			-	2,000,000	2,000,000
$0.35 (22 August 2015) Unlisted Options	27				-	400,000	400,000
$0.60 (25 May 2014) Unlisted Directors’ Options				28	-	500,000	500,000
$0.50 (25 May 2014) Unlisted Options 29					-	500,000	500,000
$0.60 (25 May 2014) Unlisted Options 29					-	425,000	425,000
$0.70(25 May2014)Unlisted Options 29					-	425,000	425,000
**Total **					210,507,500	25,800,000	236,307,500

SUMMARY OF UNLISTED DIRECTORS’ AND EMPLOYEE OPTIONS

Date of Issue	Description of Unlisted Options	Exercise Price	Expiry Date	Vesting Criteria 30	No. of Options
27 Jul 2007	$0.55 (27 July 2012) Options	$0.55	26 Jul 2012	⅓ on 27 January 2008, ⅓ on 27 July 2008, ⅓ on 27January2009	500,000
17 Sep 2008	$0.35 (16 September 2013) Options	$0.35	16 Sep 2013	75% on grant, 25% on 17 September 2009	16,400,000
17 Sep 2008	$0.35 (16 September 2013) Options	$0.35	16 Sep 2013	50% on 17 March 2009, 25% on 17 September 2009, 25% on 17 March 2010	1,035,000
26 Oct2009	$0.60 (25 October 2014) Options	$0.60	25 Oct 2014	100% on date of issue	1,000,000
30 Nov 2009					1,000,000
26 Oct2009	$0.35 (25 October 2014) Options	$0.35	25 Oct 2014	100% on date of issue	1,650,000
30Nov 2009					2,000,000
23 Aug 2010	$0.35 (22 August 2015) Options	$0.35	22 Aug 2015	100% on date of issue	400,000
26 May 2011	$0.60 (25 May 2014) Directors’Options	$0.60	25 May 2014	100% on date of issue	500,000
26 May 2011	$0.50 (25 May 2014) Options	$0.50	25 May 2014	100% on date of issue	500,000
26 May 2011	$0.60 (25 May 2014) Options	$0.60	25 May 2014	100% on date of issue	425,000
26 May 2011	$0.70 (25 May 2014) Options	$0.70	25 May 2014	100% on date of issue	425,000

24 Terms and conditions of issue are set out in a Notice of Meeting and Explanatory Statement dated 21 June 2007 for a General Meeting held on 7 July 2007 and in an ASX Appendix 3B New Issue Announcement lodged on 3 August 2007

25 Terms and conditions of issue are set out in a Notice of Meeting and Explanatory Statement dated 18 August 2008 for a General Meeting held on 17 September 2008 and in an ASX Appendix 3B New Issue Announcement lodged on 24 September 2008

26

Terms and conditions of issue are set out in a Notice of Meeting and Explanatory Statement dated 26 October 2009 for an Annual General Meeting held on 30 November 2009 and in ASX Appendix 3B New Issue Announcements lodged on 26 October 2009 and 1 December 2009

27

Terms and conditions of issue are set out in an ASX Appendix 3B New Issue Announcements lodged on 23 August 2010

28 Terms and conditions of issue are set out in a terms and conditions of issue are set out in a Notice of Meeting and Explanatory Statement dated 15 April 2011 for a General Meeting held on 26 May 2011 and in an ASX Appendix 3B New Issue Announcement lodged on 27 May 2011

29 Terms and conditions of issue are set out in an ASX Appendix 3B New Issue Announcement lodged on 27 May 2011

Options which have vested may be exercised at any time thereafter, up to their expiry date

30

JUNE 2011 QUARTERLY REPORT | 23

SECURITIES INFORMATION as at 28 July 2011

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DISTRIBUTION OF ORDINARY FULLY PAID SHARES

	Spread		**of **	Holdings	Number of Holders	Number of Units	**% of Total Issue Capital **
	1	-		1,000	1,215	483,927	0.230
	1,001	-		5,000	403	986,709	0.469
	5,001	-		10,000	263	2,271,515	1.079
	10,001	-		100,000	502	17,358,144	8.246
	100,001	-		and over	126	189,407,205	89.976
**Total **					2,509	210,507,500	100%

TOP 20 ORDINARY FULLY PAID SHAREHOLDERS

Rank Shareholder	Total % Issued
	Shares Capital
1 J P MORGAN NOMINEES AUSTRALIA LIMITED JP MORGAN NOMINEES AUSTRALIA LIMITED 2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 3 3 NATIONAL NOMINEES LIMITED 4 CITICORP NOMINEES PTY LIMITED CITICORP NOMINEES PTY LIMITED 5 RBC DEXIA INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED RBC DEXIA INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED RBC DEXIA INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED	41,377,125 3,378,919 Sub-total 44,756,044 21.261 23,469,335 10,582,382 25,351 Sub-total 34,077,068 16.188 29,434,014 13.982 18,418,229 1,000,000 Sub-total 19,418,229 9.224 7,785,554 30,962 3,365 Sub-total 7,819,881 3.715
6 ORION EQUITIES LIMITED 7 MR PETER KELVIN RODWELL 8 MRS LINDA SALA TENNA & MRS LISA SHALLARD 9 GWYNVILL TRADING PTY LTD 10 FLANNERY FOUNDATION PTY LTD	6,332,744 3.008 2,744,818 1.304 2,700,000 1.283 2,664,605 1.266 2,580,000 1.226
11 COGENT NOMINEES PTY LIMITED 12 THORPE ROAD NOMINEES PTY LTD 13 MR LUCAS JAMES KOEKOEK 14 EXELMONT PTY LTD 15 BLUEFLAG HOLDINGS PTY LTD	2,198,600 1.044 2,104,814 1.000 2,000,000 0.950 1,424,000 0.676 1,053,000 0.500
16 HOUVAN PTY LTD 17 MR ANDREW BRUCE RICHARDS 18 COVELANE GOLD COAST PTY LTD 19 MF CUSTODIANS LTD 20 GURRAVEMBI INVESTMENTSPTY LTD	1,000,000 0.475 1,000,000 0.475 929,561 0.442 825,000 0.392 806,438 0.383
**Total **	165,868,816 78.794%

JUNE 2011 QUARTERLY REPORT | 24

Alara Resources Limited and controlled entities

Appendix 5B June 2011 Mining Exploration Entity Quarterly Report

Appendix 5B Mining Exploration Entity Quarterly Report

Name of entity Alara Resources Limited and controlled entities

ACN or ARBN 122 892 719

Quarter Ended 30 June 2011

Consolidated statement of cash flows Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net operating cash flows	Consolidated	Consolidated
	Current Quarter June 2011 $'000	Year to Date 12 months $'000
	- (2,043) - - (903) - 2 7 - - -	- (3,095) - - (3,405) - 218 - - -
	(2,874)	(6,282)

Alara Resources Limited (A.B.N. 27 122 892 719) Level 14, The Forrest Centre, 221 St Georges Terrace, Perth, Western Australia 6000 Tel: +61 8 9214 9787 Email: info@alararesources.com Fax: +61 8 9322 1515

Page 25

Alara Resources Limited and controlled entities

Appendix 5B June 2011 Mining Exploration Entity Quarterly Report

	Consolidated	Consolidated
	Current Quarter June 2011 $'000	Year to Date 12 months $'000
1.8 Net operatingcash flows(carried forward)	(2,874)	(6,282)
Cash flows related to investing activities 1.9 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.11 Loans to other entities 1 12 Loans repaid by other entities . 1.13 Other (provide details if material) Joint venture company loans Net investing cash flows 1.14Total operating and investing cash flows	- - - - - (21) (332) - -	- (3,814) (51) - - (21) (332) - 13
	(353)	(4,205)
	(3,227)	(10,487)
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1 20 Other (provide details if material) . Share issue costs Net financing cash flows	30,240 - - - - (1,663)	40,820 - - - - (2,250)
	28,577	38,570
Net increase (decrease) in cash held 1 21 Cash at beginning of quarter/year to date . 1.22 Exchange rate adjustments to item 1.20 1.23Cash at end of quarter	25,350 6 798 , 51	28,083 4 332 , (216)
	32,199	32,199

Alara Resources Limited (A.B.N. 27 122 892 719) Level 14, The Forrest Centre, 221 St Georges Terrace, Perth, Western Australia 6000 Tel: +61 8 9214 9787 Email: info@alararesources.com Fax: +61 8 9322 1515

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Alara Resources Limited and controlled entities

Appendix 5B June 2011 Mining Exploration Entity Quarterly Report

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

related entities 1.24 Aggregate amount of payments to the parties included in item 1.2 1.25 Aggregate amount of loans to theparties included in item 1.10	Current Quarter June 2011 $' 000
	(166)
	-

• 1.26 Explanation necessary for an understanding of the transactions

Directors' fees, salaries and superannuation for the quarter.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

None.

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

N one.

Financing facilities available 3.1 Loan facilities 3.2 Credit standbyarrangements	Amount available $'000	Amount used $'000
	-	-
	-	-

Alara Resources Limited (A.B.N. 27 122 892 719) Level 14, The Forrest Centre, 221 St Georges Terrace, Perth, Western Australia 6000 Tel: +61 8 9214 9787 Email: info@alararesources.com Fax: +61 8 9322 1515

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Alara Resources Limited and controlled entities

Appendix 5B June 2011 Mining Exploration Entity Quarterly Report

Estimated cash outflows for next quarter 4.1 Exploration and evaluation 4 2 De elopment . v 4.3 Production 4.4 Administration	Next Quarter $' 000
	(5,100)
	-
	-
	(800)
Total	(5,900)

Reconciliation of cash Reconciliation of cash at the end of the month (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows	Consolidated	Consolidated
	C t urren Quarter $' 000	P i rev ous Quarter $' 000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (Bank Bills)	5,093	6,725
	27,152	73
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	32,245	6,798
	46 -

Changes in interests in mining tenements

6.1 6.2	Interests in mining tenements relinquished, reduced or lapsed	Tenement reference	Nature of interest (note (4))	Interest at beginning of quarter	Interest at end of quarter
		Refer to Quarterly Activities Report
	Interests in mining tenements acquired or increased	Refer to Quarterly Activities Report

Alara Resources Limited (A.B.N. 27 122 892 719) Level 14, The Forrest Centre, 221 St Georges Terrace, Perth, Western Australia 6000 Tel: +61 8 9214 9787 Email: info@alararesources.com Fax: +61 8 9322 1515

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Alara Resources Limited and controlled entities

Appendix 5B June 2011 Mining Exploration Entity Quarterly Report

Issued and quoted securities at end of current quarter

		Total number	Numberquoted	Issue price per security (seenote 5) (cents)	Amount paid up per security (seenote 5)
7.1 Preference securities+ 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions	Preference securities+
7.3 Ordinary securities+ 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital buy-backs ,	Ordinary securities+	126,507,500	126,507,500
		84,000,000	84,000,000
7.5 Convertible debt securities+ 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 7.8 7.9 7.10	Options Unlisted $0.55 (26 July 2012) Options Unlisted $0.35 (16 September 2013) Options Unlisted $0.35 (16 September 2013) Options Unlisted $0.35 (25 October 2014)Options Unlisted $0.60 (25 October 2014) Options Unlisted $0.35 (22 August 2015) Options	500,000 16,400,000 1,000,000 3,650,000 2,000,000 400,000	- - - - - -	Exercise price 55 cents 35 cents 35 cents 35 cents 60 cents 35 cents	Expiry date 26 July 2012 16 September 2013 16 September 2013 25 October 2014 25 October 2014 22 August 2015
	Issued during quarter Unlisted $0.60 (25 May 2014) Directors' Options Unlisted $0.50 (25 May 2014) Options Unlisted $0.60 (25 May 2014) Options Unlisted $0.70 (25 May 2014) Options Exercised during quarter Cancelled during quarter Unlisted $0.35 (16 September 2013) Options	500,000 500,000 425,000 425,000 35,000	- - - - - -	60 cents 50 cents 60 cents 70 cents - 35 cents	25 May 2014 25 May 2014 25 May 2014 25 May 2014 - 16 September 2013
7.11	Debentures (totals only)
7.12	Unsecured notes

Alara Resources Limited (A.B.N. 27 122 892 719) Level 14, The Forrest Centre, 221 St Georges Terrace, Perth, Western Australia 6000 Tel: +61 8 9214 9787 Email: info@alararesources.com Fax: +61 8 9322 1515

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Alara Resources Limited and controlled entities

Appendix 5B June 2011 Mining Exploration Entity Quarterly Report

Compliance statement

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does give a true and fair view of the matters disclosed.

31 July 2011

Melvin Campbell Chief Financial Officer

Notes:

TheCompany currently holds the following listed share investments: Listed securities	30-Jun-11 31-Mar-11 Market Value Market Value
	$875,603 $1,304,469
	$875,603 $1,304,469

' Share investments are regarded as liquid assets to supplement the Company s cash reserves .

+ See Chapter 19 for defined terms

NOTES

• 1) The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position . An entity wanting to disclose additional information is encouraged to do so , in a note

• 2) The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent

• 3) Issued and quoted securities The issue price and amount paid up is not required in items 7 . 1 and 7 . 3 for fully paid securities .

• 4) The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5) Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• 6) The Company holds foreign currencies denominated in US dollars and Peruvian Nuevo Soles. Fluctuations in foreign exchange rates have been accounted for in this cashflow report using the exchange rate as at 31 December 2010.

Alara Resources Limited (A.B.N. 27 122 892 719) Level 14, The Forrest Centre, 221 St Georges Terrace, Perth, Western Australia 6000 Tel: +61 8 9214 9787 Email: info@alararesources.com Fax: +61 8 9322 1515

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