AUSQUEST LIMITED — Capital/Financing Update 2013

Oct 31, 2013

November 1, 2013 ASX Release

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Dear Shareholder,

UPDATE ON FRASER RANGE AND PERU EXPLORATION

I last wrote to you in July to outline our new exploration venture in Peru, South America and to provide you with a copy of our shareholder newsletter “The Peru Copper Search”.

With significant progress achieved in Peru as we move towards the drilling stage on a number of targets early next year and the timetable to drilling at our Dundas nickel-copper project in WA’s Fraser Range region recently confirmed, I am pleased to provide you with a copy of our November/December 2013 shareholder newsletter.

Entitled “Big Targets, Big Leverage, Big Opportunity from High-Impact Drilling”, this newsletter provides some background information on what is shaping up as one of the most important phases of exploration activity in AusQuest’s history.

Drilling is scheduled to commence in the Fraser Range in early December and we are confident that drilling operations to test key initial copper-gold targets in Peru will commence during the first quarter of 2014.

This is an exciting time for AusQuest, and I trust that the information provided in this newsletter is useful in putting our upcoming exploration activities into some context.

If you have any questions about any of our projects or activities, please contact the company on (08) 9364 3866.

Yours faithfully,

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Greg Hancock Chairman

AusQuest Limited 8 Kearns Crescent Ardross WA 6153 (T): 08 9364 3866 (F): 08 9364 4892 www.ausquest.com.au

UNEARTHING PROVINCIAL-SCALE MINERAL OPPORTUNITIES

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Big Targets, Big Leverage, Big Opportunity from High-Impact Drilling

Drilling programs set to begin across two continents

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November / December 2013

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“AusQuest is about to embark on one of the most significant phases of exploration activity in its history. A drill program is confirmed and a rig booked to start drilling in early December to test three large nickel-copper targets in the Fraser Range, 80km south of the world-class Nova discovery. At the same time, we are moving closer to drilling up to seven world-class IOCG and porphyry copper-gold targets in Peru. Success at any one of these could quickly change the face of the company…” – AusQuest MD Graeme Drew

Investment Highlights

• Huge leverage to exploration success: enterprise value of just $2.5M.

• Recent successful $1.8M raising with SPP currently underway to underpin upcoming exploration programs.

Nickel-Copper: Fraser Range (WA)

• 3 large nickel-copper targets confirmed 80km south of the Nova/Bollinger nickel-copper discoveries.

• 2 strong and 1 moderate conductor with strike lengths of ~400m to 800m: target depths ~50m to 200m.

• Premium drill contractor DDH1 secured – timetable to drilling confirmed as early December 2013.

• Minimum of five diamond drill-holes (~1,200m) planned to test the Alpha, Beta & Omega targets.

Porphyry and IOCG Copper-Gold (Peru, South America)

• Large drill targets confirmed at seven prospects within recently secured copper-gold portfolio in Peru.

• Large-scale magnetic/gravity targets reflecting possible IOCG mineralisation confirmed at 3 prospects (100%).

• Large-scale porphyry copper (3) and/or IOCG (1) targets confirmed in the JV area along trend from the Tia Maria copper deposit (640Mt @ 0.39% Cu).

• Drilling proposals for joint venture projects submitted to global miner Cliffs; drill permitting underway.

• Targeting copper-gold deposits in the 500Mt-1Bt size range grading in excess of 0.5% Cu eq.

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UNEARTHING PROVINCIAL-SCALE MINERAL OPPORTUNITIES

- Fraser Range Nickel Copper

• Why are we in the Fraser Range?

The Fraser Range belt is arguably one of the hottest exploration districts in Australia, having risen to prominence last year following the discovery of the world-class Nova nickel-copper-cobalt deposit by Sirius Resources, followed this year by the nearby Bollinger discovery.

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Nova is a magmatic nickel sulphide deposit that is reported to share many similarities with Canadian deposits such as Raglan (Xstrata), Voiseys Bay (Vale) and Thompson (Vale), which are often much larger than Australian nickel sulphide deposits.

The combined Nova-Bollinger resource now stands at 14.6Mt grading 2.2% nickel, 0.9% copper and 0.08% cobalt.

The discovery of Nova has sparked a rush of exploration interest in the Fraser Range belt, which extends north towards the world-class Tropicana gold deposit and south towards the town of Esperance. Even though it is just 250km east of Kalgoorlie, the region is relatively under-explored by modern standards.

• What exactly do we have in the Fraser Range?

AusQuest’s 100%-owned Dundas Project comprises a 450km[2 ] tenement package located 100km south-east of Norseman and approximately 80km south of Nova. The tenements cover a structurally complex region bordering the south-west margin of the main Fraser Range Complex which hosts the Nova discovery.

AusQuest has held these tenements for some time as part of its existing Australian exploration portfolio, but recently reassessed this ground in light of the Nova discovery.

• What have we done so far and what have we found?

We have completed a combination of traditional airborne and ground-based exploration including surface geochemistry and ground-based geophysics to find indicators of nickel sulphide mineralisation. These techniques were very important in discovering the Nova deposit.

These surveys were successful in defining two strong and one moderate conductor with strike lengths ranging from 400m to 800m, and a nickel-copper soil anomaly coincident with one of the conductors.

These targets are considered to be high priority targets and, combined with geological evidence that we have mafic and ultramafic rock packages on our tenements, gives us the confidence to test them with drilling.

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UNEARTHING PROVINCIAL-SCALE MINERAL OPPORTUNITIES

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Alpha anomaly Omega anomaly Beta anomaly
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 What are the next steps at Fraser Range?

We have secured the services of DDH1 Drilling, one of the most experienced and best known drilling contractors in Australia, who recently conducted the resource drill-out for Sirius at the Nova/Bollinger discoveries.

DDH1 expects to have a drill rig on site by the end of November 2013, with drilling to commence shortly after. The program will comprise a minimum of five diamond drill holes (~1,200m) to test the Alpha, Beta and Omega targets.

Down-hole EM surveys will also be completed in each hole to test for conductors that were not intersected by the drilling, but which occur within a 50m radius of the drill-hole.

Results from the drilling will be available on a progressive basis. Assay results typically take 2-3 weeks depending on laboratory availability and scheduling.

• What else is planned at Dundas?

We plan to carry out further EM surveying to complement the upcoming drilling because we have shown that our tenements contain significant areas of the prospective stratigraphy that may host nickel-copper mineralisation. These areas have never been tested before.

Depending on the results of the first round of drilling, and the results of the EM surveys, we will make a decision on whether to commit to further drilling in the region.

Peru Porphyry and IOCG Copper-Gold

Over the past two years AusQuest has assembled a worldclass exploration opportunity in Peru, South America.

Peru has an excellent copper pedigree when compared to most other countries, making it one of the world’s best destinations for copper exploration initiatives. In 2011, copper production from Peru was reported as 1,240Kt, making it the third largest copper producer in the world behind China (1,310Kt) and its southern neighbour, Chile (5,260Kt).

Peru is also considered to be relatively under-explored relative to Chile but offers a mining-friendly jurisdiction with low sovereign risk.

In joint venture with global miner Cliffs Natural Resources Exploration (CNRE), AusQuest has assembled an extensive, high-quality tenement package in the southern coastal belt of Peru, a world-class mineral province which is highly prospective for large-scale porphyry copper and iron oxide copper-gold (IOCG) deposits. We are now at the point where this exciting new venture is ready to move forward to the drilling stage.

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UNEARTHING PROVINCIAL-SCALE MINERAL OPPORTUNITIES

• What have we achieved in Peru since the July newsletter?

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We have been very busy in Peru and we’re now at the drilling stage at a number of prospects. In summary:

• We have identified and confirmed large-scale drill targets at seven prospects, three on 100%-owned ground and four within projects subject to our JV with Cliffs;

• We have confirmed large-scale magnetic and gravity targets reflecting possible IOCG mineralisation at the Azucar , El Jaguay and Lana prospects (100%);

• We have confirmed large-scale targets associated with surface copper and porphyry-style alteration from ground-based geophysical surveys at the Cardonal and Puite prospects;

Puite Copper prospect showing overlapping magnetic, IP, and Cu anomalies

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• We have submitted drilling proposals for IOCG and porphyry copper targets at the Colorada, Cardonal, Puite and Cerro de Fierro prospects to our JV partner Cliffs;

• We have commenced the drill permitting process at the Lana gravity target and at the Cardonal and Puite prospects.

The Company is confident that drilling operations to test key initial targets should commence during the first quarter of 2014.

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Cardonal Porphyry Copper Target showing relationship between IP and anomalous Cu

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Ground Magnetic Images over the Azucar and El Jaguay prospects

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Capital Structure

Directors

Shares on issue: 186.5M Options on issue: 21.25M Cash Reserves: ~$1.3M (October 2013)*

Graeme Drew Managing Director

John Ashley Non-Executive Director

*Note: SPP underway to raise a further $740,000, closing 11 November 2013. Tranche 2 placement funds (~$1.3M) subject to shareholder approval at AGM on 26 November.

Greg Hancock Non-Executive Chairman

Contact

Chris Ellis Non-Executive Director

8 Kearns Crescent Ardross WA 6153 Phone: (08) 9364 3866

ASX Code: AQD

COMPETENT PERSON’S STATEMENT

The details contained in this report that pertain to exploration results are based upon information compiled by Mr Graeme Drew, a full-time employee of AusQuest Limited. Mr Drew is a Fellow of the Australasian Institute of Mining and Metallurgy (AUSIMM) and has sufficient experience in the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (JORC Code). Mr Drew consents to the inclusion in the report of the matters based upon his information in the form and context in which it appears.