AUSQUEST LIMITED — Interim / Quarterly Report 2014

Oct 27, 2014

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Quarterly Report – 30[th] September 2014

HIGHLIGHTS

AUSTRALIA – BASE METALS (Nickel, Copper)

• AusQuest’s strategic footprint in the emerging Fraser Range nickel-copper province of WA expanded to 1,850km[2] with acquisition of a new tenement located ~50km south of the Nova-Bollinger nickel-copper deposit.

• Reconnaissance geochemical sampling commenced over the Gibson Soak Exploration Licence, located ~30km north of the Port of Esperance, following grant of the title.

• Reconnaissance geochemical sampling about to commence over possible mafic intrusions within the Balladonia titles which appear similar to those being tested by Sirius at their Crux prospect, ~50km to the west.

PERU – COPPER-GOLD

• Drilling approval received for nine drill sites at the Lana Project, a large-scale (~20km²) gravity target in southern Peru, bringing to three the number of porphyry or IOCG coppergold projects now cleared for drilling.

• Discussions with potential joint venture partners advanced with several parties expressing interest in obtaining access to the Company’s projects and data.

• New porphyry copper targets located at the Colorada prospect and at Chololo, where sericite alteration was identified within volcanic rocks implying proximity to possible nearby porphyry copper mineralisation.

WEST AFRICA GOLD

• AusQuest’s Joint Venture partner, Burkinor SARL, completed auger sampling over seven prospects prior to the wet season, with ~18,000 samples submitted for analysis.

• Extensive gold auger anomalies (>25ppb Au) located at several prospects within the Kapogouan and Komoe tenements. Further sampling and possible drilling are planned to re-commence at the conclusion of the wet season.

CORPORATE

• Loan and Convertible Note Agreement for up to $750,000 secured from AusQuest’s major shareholder at a minimum conversion price of 2c, to underpin ongoing exploration. The Loan is interest-free for a period of six months from the date of issue of each Note.

OVERVIEW

During the September Quarter, AusQuest continued to focus its exploration activities on two main areas of interest, the emerging Fraser Range nickel-copper province in WA and an emerging portfolio of porphyry and/or IOCG copper-gold targets in Peru.

The Company increased its strategic exploration footprint in the Fraser Range to ~1,850km² during the Quarter as a result of a key strategic addition to its exploration portfolio. In southern

Peru, drill permits were approved for three of the Company’s copper-gold targets and discussions with potential joint venture parties were advanced.

In West Africa, the Company’s joint venture partner, Burkinor SARL, continued exploration activities (auger sampling) over the Company’s tenements until the onset of the wet season. Burkinor, a wholly-owned subsidiary of TSXlisted SEMAFO Inc, can earn up to 80% equity in the Banfora projects by spending a total of $7.5 million over a three-year period.

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Figure 1: Project Locations – Australia and Peru

AUSTRALIA – FRASER RANGE PROJECTS (Nickel, Copper)

AusQuest controls approximately 1,850km² of title within the Fraser Range Province of WA, which hosts the Nova–Bollinger nickel-copper deposit discovered by Sirius Resources and the Tropicana gold mine, commissioned recently by Anglo Gold (Figure 2). The region is the focus of increased exploration activity by a range of companies and is now considered to be one of the country’s premier locations for exploration.

Gibson Soak Ni-Cu Project (100% AQD)

The Gibson Soak Project is located ~30km north of the port of Esperance, within the broader Fraser Range terrain. The tenement, which covers an area of ~380km, is centred on a

regional north-east trending gravity high with similarities to the Fraser Range Complex which hosts the Nova-Bollinger nickel-copper discoveries.

The Gibson Soak tenement was granted on 3[rd] September 2014. Much of the area is covered by farm-land with very little outcrop to be found; however, the road network is excellent, providing easy access to areas of potential interest.

Field reconnaissance along public roads has already identified the presence of mafic metagabbro outcrop within the regional gravity high (15–25 milligals), suggesting similarities to the Fraser Complex which hosts the Nova-Bollinger nickel-copper discoveries ( Figure 3 ).

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Figure 2: Fraser Range Project Locations

Reconnaissance geochemical sampling along public roads is planned to commence in October to outline areas for more detailed sampling and/or ground EM surveys.

The regional gravity anomaly is approximately 20km x 7km in size within the Company’s

tenement, and represents a priority target for Nova look-alikes now that title has been granted.

Negotiations with selected land-owners have commenced to enable detailed ground-based surveys to be undertaken over farm-land.

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Figure 3: Gibson Soak Magnetic and Gravity Images showing soil sampling traverses

Balladonia Ni-Cu Project (100% AQD)

The Balladonia Project is located ~30km east of the Dundas project and ~50km south of the Nova–Bollinger nickel-copper deposit. It consists of two Exploration Licence applications covering an area of ~1,150km², within a structurally complex region of the Fraser Range Terrain and centred above the southern margin of a deep regional gravity anomaly (~30 milligals) which is thought to reflect buried mafic/ultramafic rocks similar to those that may be related to the formation of the Nova deposit. The tenements occur within the Dundas Nature Reserve and are expected to be granted within the coming months.

The Nova-style target sequence outlined along the western margin of the tenements will be tested by an east-west traverse along the old telegraph line. Further sampling and ground EM surveys will be undertaken once tenements are granted and access approved.

The reconnaissance sampling programme which was to commence in October has been delayed by heavy rains in the area and is now planned to commence in November. This work will take approximately two weeks to complete with results expected shortly thereafter.

Dundas Ni-Cu Project (100% AQD)

Detailed aeromagnetic surveys over the Balladonia tenements have outlined a number of inferred mafic intrusions both parallel to and cross-cutting the general trend of the Fraser Range Belt ( Figure 4 ).

These intrusions are characterised by negative magnetic anomalies similar to those being tested by Sirius at their Crux and Centauri prospects, located approximately 30km north-west of the Balladonia title.

The larger intrusions represent priority nickelcopper exploration targets and will be the subject of an initial reconnaissance sampling programme.

The Dundas Project is located ~100km eastsoutheast of Norseman (WA), and ~80km southwest of the Nova-Bollinger nickel-copper discovery (Sirius Resources). The tenements cover an area of ~350km² within a structurally complex region bordering the south-west margin of the main Fraser Range Complex which hosts the Nova discovery.

Ground electromagnetic (EM) surveys over the Dundas East prospect were postponed until initial target identification within the Company’s new tenements in the Fraser Range had been completed and nickel-copper targets prioritised.

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Figure 4: Balladonia Magnetic Image showing priority targets and areas for soil sampling

PERU COPPER-GOLD PROJECTS (100% AQD)

Over the past three years, AusQuest has assembled a large portfolio of copper-gold prospects along the southern coastal belt of Peru in South America with up to eight targets identified for drilling as possible iron-oxide copper-gold (IOCG) and/or porphyry copper

targets with the size potential to be of significance to AusQuest (Figure 5). Peru is one of the world’s most prominent destinations for international copper exploration and is considered to be a prime location for world-class exploration opportunities.

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Figure 5: Peru Project Locations

During the Quarter, a drilling permit for the Lana Project (nine drill sites) was received from the Ministry of Energy and Mines (MEM), clearing the way for drill testing of this large scale (~20km²) gravity target, and bringing to three the number of projects now cleared for drilling in southern Peru.

The Lana Project is located approximately 30km from the coastal town of Atico in southern Peru and covers a large (~20km²) discrete gravity anomaly (8 milligals), located close to the intersection of major structures interpreted from the Company’s aeromagnetic data.

The gravity target is offset from a deep (~400m) magnetic response, suggesting potential for buried IOCG and/or porphyry copper style mineralisation beneath the sediment cover ( Figure 6 ).

During the Quarter, the Company also continued to expand its copper-gold portfolio in Peru through ongoing regional and generative project exploration activities.

At the Colorada Prospect, which is located ~40km from the port of Ilo, mapping and sampling south of mineralised epithermal veins previously located in the area, identified numerous NNW trending diorite dykes containing anomalous copper values (>100ppm Cu) and intruding basement granites, suggesting potential for buried porphyry copper mineralisation offset from the main area of veining.

A reconnaissance site visit to the Chololo prospect, which is located immediately north-east of the Ilo Este prospect currently being drilled by Latin Resources ( Figure 7 ), identified alteration and surface geochemistry indicative of nearby porphyry copper mineralisation.

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Figure 6: Lana Gravity target Permitted Drill-sites

The Chololo prospect straddles a major NE trending fault and occurs at elevations ~300m above that of the neighbouring Ilo Este prospect, suggesting good potential for the upper parts of a porphyry copper system being preserved within the Company’s title.

Sericite alteration found within volcanic rocks in close proximity to anomalous rock samples (Cu>100ppm, Mo >10ppm) is considered a good indicator of proximity to the centre of a porphyry system. A programme of mapping and systematic sampling is planned to commence in the December Quarter to identify areas for possible future drilling.

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Figure 7: Chololo Porphyry Copper Prospect

Discussions with potential joint venture partners have advanced with several parties expressing interest in obtaining access to the Company’s projects and data.

The Company is aiming to secure a suitable partner to help fund upcoming drill programmes that have already received approval from Government, by exchanging equity in the

projects for a work commitment and ongoing evaluation of the projects.

The Company continues to be encouraged by the results obtained to date from its Peruvian projects, and plans to continue exploration for large-scale IOCG and/or porphyry copper targets within the covered areas of southern Peru.

GOLD – WEST AFRICA

Comoe Project (AQD 100%, Burkinor SARL earning to 80%)

The Comoe Project is located near the town of Banfora in south-west Burkina Faso, West Africa, within an extensive greenstone belt. The area is relatively unexplored except for extensive historical surface sampling programs and widespread artisanal gold workings along the belt. AusQuest controls approximately 1,150km² of title within the Belt, which is now under a Farm-In and Joint Venture Agreement with Burkinor SARL, a wholly-owned subsidiary of TSX-listed SEMAFO Inc. Burkinor has the right to earn up to an 80% interest in all the Banfora permits by spending a total of US$7.5 million over a three-year period. Burkinor are the operators of the JV.

During the Quarter, Burkinor reported that exploration over the project continued until midAugust when activities were suspended due to the

onset of the wet season. A total of 9,200 auger holes for 61,142m (average depth ~6.5m) have now been completed over seven prospects since the commencement of the joint venture five months ago.

Auger traverses are nominally 400m apart with holes spaced at 25m intervals. Geological logging of samples from this program along with geological mapping within priority areas is helping to prioritise targets for further sampling and/or drilling.

Burkinor reported that anomalous gold assays (25ppb to >500ppb Au) in weathered bedrock had been returned from 6 of the 7 prospects tested, with many of the gold anomalies interpreted to extend over several kilometres in length ( Figure 8 ). Further auger sampling is planned after the completion of the wet season, with Burkinor also intending to complete reconnaissance Reverse Circulation (RC) drilling traverses over selected prospects during the next field season.

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Figure 8: Banfora JV gold auger anomalies reported by Burkinor

BUSINESS DEVELOPMENT

AusQuest continues to look for opportunities both within Australia and offshore with the aim of adding value to the Company, especially in areas of immediate interest to the Company.

CORPORATE

During the Quarter, the Company secured funding of up to $750,000 from its major shareholder by executing a Loan and Convertible Note Agreement, subject to shareholder approval at the Company’s Annual General Meeting to be held on or about the 26[th] November 2014.

The additional funds, together with existing cash reserves of $650,000 as at the end of September 2014, will enable AusQuest to continue to advance its prospective WA nickel projects and Peru copper projects well into 2015.

Under the terms of the Agreement, the loan may be requested in up to three advances of $250,000, each with the conversion price for AusQuest shares set at a minimum price of 2 cents. The Loan is interest-free for a period of six months from the date of issue of each Note.

A summary of the terms for the Loan and Convertible Note Agreement was reported to the ASX on 6[th] October 2014.

The funding arrangement represents a strong vote of confidence from the Company’s major shareholder, underpinning ongoing exploration efforts and avoiding the need to undertake a dilutive capital raising at a low point in the market.

KEY ACTIVITIES – DECEMBER 2014 QUARTER

The following activities are planned for the December 2014 Quarter:

• Balladonia (Ni-Cu) – Reconnaissance sampling, possible ground EM surveys;

• Gibson Soak (Ni-Cu) – Reconnaissance sampling – Access agreements with land owners;

• Peru (Cu-Au) – Drill preparations for Cardonal, Puite and Lana;

• Peru (Cu-Au) – Mapping/sampling at the Chololo prospect;

• Comoe (Au) – Monitor results from Burkinor JV programs.

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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 2012 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. The information presented in this report in relation to the Ceniceros Rojos and Dundas Projects is extracted from the ASX announcements dated 25 June and 20 July 2014 titled ‘AusQuest Receives First Peru Drill Approval’ and ‘Fraser Range New Exploration Targets’respectively. The Competent Person responsible for that announcement is Mr. Graeme Drew. The report is stored on the ASX website under ASX- AQD, and on the Company’s website at www.ausquest.com.au. AusQuest confirms that it is not aware of any new information or data that materially affects the information included in that announcement.

FORWARD LOOKING STATEMENT

This report contains forward looking statements concerning the projects owned by AusQuest Limited. Statements concerning mining reserves and resources may also be deemed to be forward looking statements in that they involve estimates based on specific assumptions. Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on management’s beliefs, opinions and estimates as of the dates the forward looking statements are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

JORC Code, 2012 Edition – Table 1 report Auger Sampling Banfora (Burkina Faso) Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or specific	•Auger sampling comprised the collection of two
techniques	specialised industry standard measurement tools appropriate to the minerals	samples – a 2 metre interface laterite-saprolite
	under investigation, such as down hole gamma sondes, or handheld XRF	sample and a 2 metre saprolite sample near the
	instruments, etc). These examples should not be taken as limiting the broad	bottom of the hole.
	meaning of sampling.	•Auger hole locations are recorded by hand-held
	• Include reference to measures taken to ensure sample representivity and the	GPS.
	appropriate calibration of any measurement tools or systems used.	•Auger sampling was carried out on linear traverses
	• Aspects of the determination of mineralisation that are Material to the Public	400m apart with holes spaced at 25m intervals.
	Report.	•The auger samples are logged by a geologist and
	• In cases where ‘industry standard’ work has been done this would be relatively	entered into a sampling book or onto a sampling
	simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from	sheet.
	which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other
	cases more explanation may be required, such as where there is coarse gold
	that has inherent sampling problems. Unusual commodities or mineralisation
	types(eg submarine nodules) may warrant disclosure of detailed information.
Drilling techniques	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger,	•Auger drilling used a motorized rig on the back of a
	Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth	small 4WD vehicle.
	of diamond tails, face-sampling bit or other type, whether core is oriented and if	•Hole depths varied from ~6 to 8 metres.
	_so, by what method, etc). _
Drill sample	• Method of recording and assessing core and chip sample recoveries and results	•High recovery of samples was achieved at all sites.
recovery	assessed.	•All samples were reduced to 1kgm in size through
	• Measures taken to maximise sample recovery and ensure representative nature	controlled sample splitting.
	of the samples.	•Samples are considered representative for the
	• Whether a relationship exists between sample recovery and grade and whether	materials sampled
	sample bias may have occurred due to preferential loss/gain of fine/coarse
	material.
Logging	• Whether core and chip samples have been geologically and geotechnically	•Each auger hole was geologically logged for rock
	logged to a level of detail to support appropriate Mineral Resource estimation,	type from the bottom of the hole.
	mining studies and metallurgical studies.
	• Whether logging is qualitative or quantitative in nature. Core (or costean,
	channel, etc) photography.
	• The total length andpercentage of the relevant intersections logged.

Criteria	JORC Code explanation	Commentary
Sub-sampling	• If core, whether cut or sawn and whether quarter, half or all core taken.	•All samples were dry samples.
techniques and	• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled	•Sample sizes (1kg) are considered appropriate for
sample preparation	wet or dry.	the sample type.
	• For all sample types, the nature, quality and appropriateness of the sample	•Sample reduction was done via sample splitting to
	preparation technique.	make samples as representative as possible.
	• Quality control procedures adopted for all sub-sampling stages to maximise	•Two samples – a 2 metre interface laterite-saprolite
	representivity of samples.	sample and a 2 metre saprolite sample near the
	• Measures taken to ensure that the sampling is representative of the in situ	bottom of the hole were generally collected at each
	material collected, including for instance results for field duplicate/second-half	site.
	sampling.	•No sub-sampling was undertaken.
	• Whether sample sizes are appropriate to the grain size of the material being
	sampled.
Quality of assay	• The nature, quality and appropriateness of the assaying and laboratory	•Auger samples were crushed and pulverized to 85%
data and	procedures used and whether the technique is considered partial or total.	minus 75 microns, then trace level gold was
laboratory tests	• For geophysical tools, spectrometers, handheld XRF instruments, etc, the	determined by cyanide leach extraction with an AAS
	parameters used in determining the analysis including instrument make and	finish.
	model, reading times, calibrations factors applied and their derivation, etc.	•Standard laboratory QAQC controls were applied
	• Nature of quality control procedures adopted (eg standards, blanks, duplicates,	with data reviewed but Burkina geologists for all
	external laboratory checks) and whether acceptable levels of accuracy (ie lack of	assay jobs.
	bias) andprecision have been established.
Verification of	• The verification of significant intersections by either independent or alternative	•Auger sampling locations are compiled into Excel
sampling and	company personnel.	spreadsheets for merging with assay data when it
assaying	• The use of twinned holes.	becomes available.
	• Documentation of primary data, data entry procedures, data verification, data	•Digital data is regularly backed-up on the company’s
	storage (physical and electronic) protocols.	servers.
	• Discuss any adjustment to assay data.	•No adjustment has been made to assay data.
Location of data	• Accuracy and quality of surveys used to locate drill holes (collar and down-hole	•Auger sample sites are located with GPS to within 5
points	surveys), trenches, mine workings and other locations used in Mineral Resource	metres accuracy.
	estimation.
	• Specification of the grid system used.
	• Quality and adequacy of topographic control.
Data spacing and	• Data spacing for reporting of Exploration Results.	•Auger sampling was undertaken on a 400m x 25m
distribution	• Whether the data spacing and distribution is sufficient to establish the degree of	grid with infill to 200m in selected areas.
	geological and grade continuity appropriate for the Mineral Resource and Ore	•This spacing is considered adequate for the type of
	Reserve estimation procedure(s) and classifications applied.	program completed.
	• Whether sample compositing has been applied.
Orientation of data	• Whether the orientation of sampling achieves unbiased sampling of possible	•Sampling on a 400m x 25m grid provides greater
in relation to	structures and the extent to which this is known, considering the deposit type.	coverage alongthe strike of features targeted.

Criteria	JORC Code explanation	Commentary
geological	• If the relationship between the drilling orientation and the orientation of key	•Auger sample lines were oriented across the strike
structure	mineralised structures is considered to have introduced a sampling bias, this	of the expected mineralization.
	should be assessed and reported if material.
Sample security	• The measures taken to ensure sample security.	•Samples are securely tied/sealed in the field,
		followed by packing into larger sealed plastic bags
		for transport to the laboratory.
Audits or reviews	• The results of any audits or reviews of sampling techniques and data.	•No audits or reviews have been carried out on the
		sampling to date.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral tenement	• Type, reference name/number, location and ownership including agreements or	•The Banfora project is located in south western
and land tenure	material issues with third parties such as joint ventures, partnerships, overriding	Burkina Faso approximately 500km south west of
status	royalties, native title interests, historical sites, wilderness or national park and	Ouagadougou.
	environmental settings.	•The Banfora project comprises 9 granted exploration
	• The security of the tenure held at the time of reporting along with any known	Permits.
	impediments to obtaining a licence to operate in the area.	•The tenements are held 100% by AusQuest Limited
		but they are subject to a Farm-In and Joint Venture
		Agreement with Burkinor SARL who can earn up to
		80% equity by spending US$7.5 million in 3 years.
Exploration done	• Acknowledgment and appraisal of exploration by other parties.	•Previous exploration in the area consisting of
by other parties		surface sampling for gold has been compiled by
		AusQuest and has been used to assist with
		exploration program planning.
Geology	• Deposit type, geological setting and style of mineralisation.	•The deposit style being explored for is structurally
		controlled gold within the Birimian Greenstone Belts
		of West Africa.
Drill hole	• A summary of all information material to the understanding of the exploration	•Auger drillholes were vertical with depths ranging
Information	results including a tabulation of the following information for all Material drill	from ~5 to 8 metres.
	holes:	•The location of the auger grids is presented in
	o easting and northing of the drill hole collar	AusQuest’s September 2014 Quarterly Report.
	o elevation or RL (Reduced Level – elevation above sea level in metres) of the	•Significant results are shown as trends on the plans
	drill hole collar	presented in theQuarterlyreport as determined by

Criteria	JORC Code explanation	Commentary
	o dip and azimuth of the hole	qualified Burkinor geologists.
	o down hole length and interception depth
	o hole length.
	• If the exclusion of this information is justified on the basis that the information is
	not Material and this exclusion does not detract from the understanding of the
	report, the Competent Person should clearly explain why this is the case.
Data aggregation	• In reporting Exploration Results, weighting averaging techniques, maximum	•No weighting or assay cutting has been applied to
methods	and/or minimum grade truncations (eg cutting of high grades) and cut-off grades	the data.
	are usually Material and should be stated.
	• Where aggregate intercepts incorporate short lengths of high grade results and
	longer lengths of low grade results, the procedure used for such aggregation
	should be stated and some typical examples of such aggregations should be
	shown in detail.
	• The assumptions used for any reporting of metal equivalent values should be
	clearly stated.
Relationship	• These relationships are particularly important in the reporting of Exploration	•Auger sampling results are in essence surface
between	Results.	sampling results – no relationship with mineralization
mineralisation	• If the geometry of the mineralisation with respect to the drill hole angle is known,	is known.
widths and	its nature should be reported.
intercept lengths	• If it is not known and only the down hole lengths are reported, there should be a
	_clear statement to this effect(eg ‘down hole length, true width not known’). _
Diagrams	• Appropriate maps and sections (with scales) and tabulations of intercepts should	•Locations of auger sampling grids are provided in
	be included for any significant discovery being reported These should include,	the Company’s Quarterly report.
	but not be limited to a plan view of drill hole collar locations and appropriate
	sectional views.
Balanced reporting	• Where comprehensive reporting of all Exploration Results is not practicable,	•All significant gold trends are reported and shown on
	representative reporting of both low and high grades and/or widths should be	the plans in the Quarterly report.
	practiced to avoid misleading reporting of Exploration Results.
Other substantive	• Other exploration data, if meaningful and material, should be reported including	•The areas were selected for auger drilling based on
exploration data	(but not limited to): geological observations; geophysical survey results;	geological and geophysical data interpretations by
	geochemical survey results; bulk samples – size and method of treatment;	Burkinor.
	metallurgical test results; bulk density, groundwater, geotechnical and rock
	characteristics; potential deleterious or contaminating substances.
Further work	• The nature and scale of planned further work (eg tests for lateral extensions or	•Proposals of further work will depend on an analysis
	depth extensions or large-scale step-out drilling).	of the data by Burkinor.
	• Diagrams clearly highlighting the areas of possible extensions, including the
	main geological interpretations and future drilling areas, provided this information
	is not commercially sensitive.

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

	Name of entity
	AUSQUEST LIMITED
	ABN 35 091 542 451 Consolidated statement of cash flows
			30 September 2014
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 Net Operating Cash Flows		Current quarter $A ‘000		Year to date (3 months) $A ‘000
		- (356) - - (89) - 2 - - -		- (356) - - (89) - 2 - - -
		(443)		(443)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other – Proceeds from Semafo Inc joint venture Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - - - - 5 - - 68		- - - - - 5 - - 68
		73		73
		(370)		(370)

Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from unissued shares, options etc 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (share issue costs) Net financing cash flows	- - - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter / year to date	(370) 1,019 -	(370) 1,019 -
	649	649

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

1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A ‘000
	59
	-

1.25	Explanation necessaryfor an understandingof the transactions
	Executive directors’ salaries, superannuation, consulting fees and rental of office space. Non executive directors have agreed to waive any entitlement to be paid fees until 31 December 2014.

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

None.

Financing facilities available

Add notes as necessary for an understanding of the position.

	3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A ‘000	Amount used $A ‘000
		-	-
		-	-

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration Total	$A’000
	320
	-
	-
	150
	470

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A ‘000	Previous quarter $A ‘000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (Money market/Term Deposit)	649	1,019
	-	-
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	649	1,019

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note(2))	Interest at beginning ofquarter	Interest at end of quarter
	E 63/1672		Nil	100%

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital,buy-backs	297,503,444	297,503,444
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	9,900,000 68,750,000	- 68,750,000	Exercise price 7 cents 4 cents	Expiry date 30 Nov 2015 30Nov2016
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)

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.

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Sign here:

Date: 28 October 2014

(Company secretary)

Print name: Henko Vos

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 or notes attached to this report.

• 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 which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 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.

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