AUSQUEST LIMITED — Capital/Financing Update 2013

Sep 19, 2013

Sept 20, 2013 ASX Release

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LARGE PORPHYRY COPPER GOLD DRILL TARGETS IDENTIFIED IN PERU

Key Points

• Large drill targets identified at a further three prospects in Peru’s southern

• coastal belt.

• Targets include an extensive induced polarisation (IP) anomaly (>6km[2] ) at

• the Cardonal prospect, where a potentially large porphyry copper system may be present at depth ( see Figure 2 ).

• A discrete magnetic and IP target associated with extensive surface copper

• anomalism at the Puite prospect ( see Figure 3 ).

• An extensive magnetic target (1.5km by 1.0km) at the Cerro de Fierro

• prospect, which is located within the region of known IOCG resources ( see Figure 4 ).

• Company working towards first drilling commencing before end 2013.

AusQuest Limited (ASX: AQD) is pleased to advise that it has identified priority drill targets for porphyry copper-style mineralisation and iron oxide copper gold (IOCG) targets at a further three key prospect areas within its extensive portfolio of newly assembled coppergold exploration projects in Peru, South America.

These targets are in addition to targets already defined within the Lana and El JaguayAzucar prospects which were reported in the Company’s June 2013 Quarterly report, and are owned 100% by AusQuest. All prospects are located within the coastal belt of southern Peru.

The Managing Director of AusQuest, Graeme Drew commented,

“We are very encouraged with what we are seeing over our extensive land package in Peru. In particular the drill targets at the Cardonal, Puite and Cerro de Fierro prospects are very large and sit in one of the world's best locations for copper exploration. AusQuest looks forward to commencing drilling operations in the near future, across what it considers to be a number of highly prospective, and potentially company making projects.”

The Cardonal, Puite and Cerro de Fierro prospects are subject to a Joint Venture Agreement with Cliffs Natural Resources Exploration Inc. (CNRE), a wholly-owned subsidiary of Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF). Under the joint venture, should CNRE elect to proceed with further evaluation of one or more of these prospects, CNRE are required to sole-fund further evaluation (drilling) of the selected prospect(s) up to US$4.0M to secure

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

CNRE’s 70% interest in each prospect. If CNRE elects not to proceed with further evaluation of a prospect, ownership of the prospect will revert 100% to AusQuest.

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Figure 1: Project locations in relation to known deposits.

Induced Polarisation (IP) and ground magnetic surveys have now been completed over the Cardonal , Puite and Cerro de Fierro prospects to identify targets associated with anomalous copper geochemistry and surface alteration located by earlier mapping and sampling programs.

The Cardonal and Puite prospects are located ~10km apart within the Pampa de Las Pulgas tenements, ~30km east of the port of Ilo in southern Peru. The Cerro de Fierro prospect, which represents a possible iron-oxide copper-gold (IOCG) target, is located in the north of the joint venture area, ~35km from Chala and ~140km south-east of the Marcona and Mina Justa IOCG deposits.

At Cardonal , a localised area (~1,500m x 1,000m) containing anomalous levels of copper (100ppm Cu to 0.74% Cu) within altered dykes and breccias suggests potential for a porphyry copper system at depth in a similar geological setting to the Tia Maria deposits, located ~90km to the north-west.

Recent IP surveys over the prospect have identified an extensive chargeability anomaly (>6km²), reflecting probable sulphide mineralisation at depths of ~300m to 400m, centred immediately south of the dykes.

The Company believes that the surface copper anomalism and the interpreted buried sulphides could reflect a large porphyry copper system and drilling has been recommended ( Figure 2 ).

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

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Figure 2: Cardonal porphyry copper target showing large IP anomaly

At the Puite prospect, which is located ~10km east of Cardonal, mapping and sampling programs over limited outcrop located anomalous copper values (100ppm Cu to 0.27% Cu) within altered diorite dykes and granodiorite, scattered over a large area (~3km²) which is dominated by sand cover.

Soil sampling along ridges confirmed the copper anomalism and outlined a coherent anomaly ~1.5km long, before it disappeared beneath the cover.

Recent IP and ground magnetic surveys outlined anomalies closely associated with the copper anomalism. A discrete magnetic target ~600m x 600m in size was defined semi-coincident with the copper soil anomaly with IP results, suggesting low levels of sulphide mineralisation (<5%) marginal to the magnetic source.

The magnetic target is relatively shallow (~25m to 200m), while the IP source appears to be deeper, occurring at depths ranging from ~200m to 300m.

Drilling of the combined magnetic, IP and copper anomalies has been recommended ( Figure3 ).

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

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Figure 3: Puite porphyry copper / IOCG prospect showing magnetic and IP targets

The Cerro de Fierro prospect is located in the northern half of the Joint Venture area close to known IOCG resources at Marcona, Mina Justa and Pampa Pongo. The prospect was identified by the Company’s proprietary airborne magnetic survey with ground follow-up locating scattered copper (+/- gold) anomalism associated with structures and volcanic rocks within the area of the magnetic anomaly.

A ground magnetic survey over the target outlined an extensive (~1.5km x 1.0km) strongly magnetic source (with bulk magnetic susceptibilities of ~13,000 x 10-5 SI units), occurring at depths of 50m to 200m below surface.

Modelling implies that the source has a relatively shallow northerly dip compatible with dips shown on the available geological maps, and suggests the magnetic target may reflect possible manto-style (replacement) mineralisation within the shallow-dipping volcanic stratigraphy.

Drilling has been recommended to test the large magnetic target ( Figure 4 ).

Prior to drilling in Peru, a permitting process involving both Government agencies and community consultations (where appropriate) must be undertaken. It is anticipated that this process will take between 3 to 6 months to complete.

All areas proposed for drilling have no communities nearby and it is anticipated that approvals in at least one area may be obtained before the end of 2013, enabling drilling to commence.

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

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Figure 4: Cerro de Fierro IOCG prospect showing magnetic target

Drilling recommendations with respect to the Cardonal, Puite and Cerro de Fierro prospects have been provided to the Joint Venture for approval. A decision by CNRE is expected by the end of October 2013.

The Company looks forward to commencing drilling operations in the near future to test what it believes to be a highly prospective group of copper-gold targets with company making potential.

Graeme Drew Managing Director

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.

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