BANNERMAN ENERGY LTD — Interim / Quarterly Report 2012

Jul 30, 2012

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During the June 2012 quarter, Bannerman Resources Limited (ASX: BMN, TSX: BAN, NSX: BMN) (“ Bannerman ” or the “ Company ”) released the results of the Definitive Feasibility Study (“ DFS ”) for its 80%-owned Etango Uranium Project in Namibia, agreed terms for the Namibian state-owned mining company to acquire a 5-10% stake in Etango, completed drilling to confirm Etango depth extensions and, following quarter end, received formal environmental approval for development of the Etango Project.

HIGHLIGHTS

• Release of the results of the Etango Uranium Project DFS, confirming the viability of a long life and large scale uranium mining project .

• Receipt of environmental approval for the Etango Project from the Namibian Ministry of Environment and Tourism. The environmental approval is a necessary step in obtaining a mining licence for the Project.

• Execution of a binding Term Sheet with Namibian state-owned mining company Epangelo Mining Company (Proprietary) Limited ( Epangelo ) for Epangelo to acquire an initial 5% interest and subsequent additional 5% interest in Bannerman’s Namibian subsidiary, the sole owner of the Etango Uranium Project. Technical due diligence has been completed to Epangelo’s satisfaction and efforts are now focused on finalising the transaction documentation and Epangelo’s financing.

• Drilling during the quarter intersected consistent and broad mine-grade mineralisation under the DFS open pit mine design. These results, in addition to those reported in the previous quarter, have confirmed the Etango deposit to be open down dip to the west and at depth, indicating the potential to expand the pit design and extend the modelled mine life.

• Appointment of experienced Resource Capital Funds senior executive Ian Burvill as a Non-Executive Director following the retirement of Mason Hills who has relocated overseas.

• Cash holdings of A$9.6 million as at 30 June 2012, with significant reductions in monthly expenditure now expected following completion of the DFS.

Activities for the second half of 2012 for the Etango Project will focus on completion of the Epangelo transaction, pursuit of the Etango Project mining licence, advancement of discussions with potential development and financing partners, and prudent cash management.

Bannerman's CEO, Len Jubber, said: “Completion of the Etango Project DFS and subsequent receipt of formal environmental approval represent significant milestones and further de-risk the Etango Project. In addition, drilling carried out over the last two quarters confirms that the Etango deposit is open down dip and at depth, and therefore offers significant potential for mine life extensions beyond the current reserve life of 16 years. Etango is now one of the very few large scale and low technical risk projects backed by a DFS and with significant resource upside.”

With confirmation during the quarter of China’s extensive nuclear reactor development program, commencement of reactor restarts in Japan and further reports of production disruptions, Bannerman is well positioned to offer its investors substantial exposure to positive uranium fundamentals.

Len Jubber, Chief Executive Officer 31 July 2012

BANNERMAN RESOURCES LIMITED ABN 34 113 017 128 Corporate Office Level 1 ■ Suite 18 ■ 513 Hay Street ■ Subiaco Western Australia 6008 Post PO Box 1973 ■ Subiaco Western Australia 6904 T +61 8 9381 1436 F +61 8 9381 1068

Etango Uranium Project (Bannerman 80%)

Background

The Etango Uranium Project is one of the world’s largest undeveloped uranium deposits, located in the Erongo uranium mining region of Namibia which hosts the Rössing and Langer-Heinrich mines and the Husab project which was recently acquired by Chinese state-owned nuclear power entity China Guangdong Nuclear Power Company. Etango is 73km by road from one of the region’s busiest deep water ports through which uranium has been exported for over 35 years. Road, rail, electricity and water networks are all located nearby.

Definitive Feasibility Study

The DFS was completed early in the quarter and confirmed the viability of the long life and large scale Etango Project and forecasts potential production of 6-9 million pounds (“ Mlbs ”) U3O8 per year.

Key outcomes from the DFS, as announced to the market on 10 April 2012, are as follows:

• Declaration of Proved and Probable Ore Reserves totalling 279.6 million tonnes at an average grade of 194ppm U3O8 for 119.3 Mlbs of contained U3O8, in accordance with Australian JORC and Canadian NI 43-101 reporting standards;

• Production of 7-9 Mlbs U3O8 per year for the first five years and 6-8 Mlbs U3O8 per year thereafter, which would rank Etango as a global top 10 pure uranium project;

• Cash operating costs of US$41/lb U3O8 in the first five years and an average of US$46/lb U3O8 over the life of mine, with programs to seek reductions;

• Cash operating margin of 24% at current long term contract prices (US$60/lb U3O8) and 39% at an assumed base case long term price of US$75/lb U3O8;

• At a uranium price of US$75/lb U3O8, the Etango Project generates operating cashflow of US$2.7 billion before capital and tax, and free cashflow of US$923 million after capital and tax;

• Pre-production capital cost of US$870 million; and

• Minimum open pit mine life of 16 years, with further extensions sought through the conversion of existing Inferred Resources and new drilling programs.

Expenditure on the DFS has now come to an end and ongoing work is focused on the pursuit of licencing for the Project and completion of the Epangelo transaction (see below), as well as internal analysis of various improvement opportunities identified as part of the DFS completion process.

Project Licencing

Shortly after the end of the quarter, the Namibian Ministry of Environment and Tourism issued Bannerman with formal environmental approval for development of the Etango Project. Receipt of the environmental approval followed lodgment of the Environmental and Social Impact Assessment (“ ESIA ”) and associated Environmental Management Plan (“ EMP ”) earlier in the quarter, as well as the public consultation process conducted in the March 2012 quarter. The public consultation process involved Bannerman making available a comprehensive report and associated specialist studies, as well as presentations to key stakeholders and local communities in Namibia. Feedback from the public meetings was incorporated in the final ESIA and EMP documentation.

The environmental approval for the Project complements the environmental approval received last year for the Etango Project’s off-site infrastructure.

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The environmental approval is a necessary step in obtaining a Mining Licence for the Etango Project. Bannerman has now also lodged the DFS with the Namibian Ministry of Mines and Energy, in support of the existing Etango Mining Licence application.

Epangelo Agreement

A binding Term Sheet was signed early in the quarter for Epangelo (or its nominee) to acquire an initial 5% interest and, upon a mine development decision, a further of 5% interest in Bannerman’s Namibian subsidiary, Bannerman Mining Resources (Namibia) (Pty) Ltd (“ BMRN ”), which owns 100% of the Etango Project.

The key terms include the following:

• Epangelo to acquire 5% of BMRN by purchasing interests from the existing BMRN shareholders, with the sales proceeds for Bannerman being approximately A$3 million. The post-acquisition shareholdings in BMRN will be Bannerman (76%), Epangelo (5%) and the existing private shareholder (19%);

• Epangelo has four months to obtain the necessary acquisition finance from the Development Bank of Namibia or another financing institution acceptable to BMRN’s shareholders, and then to acquire the BMRN shares. During this period, other conditions such as Epangelo’s own due diligence investigations, the signing of full-form documentation and receipt of regulatory approvals (as required) are also to be satisfied;

• Upon Epangelo acquiring its 5% interest, it shall meet its pro-rata share of BMRN’s expenditure. If Epangelo is unable to fund its share of BMRN’s expenditure for the period from the initial acquisition up to a future decision to mine, Bannerman shall loan such funds to Epangelo with this loan to be repaid from future BMRN dividends and other distributions;

• Epangelo also holds a future one-time option at the time of a mine development decision to acquire a further 5% of BMRN for a 2.5% discount to the market value at that time;

• If Epangelo does not contribute its pro-rata share of cash calls after a mine development decision is made, it shall dilute ultimately to nil in accordance with an agreed “dilution and sale” formula;

• Pre-emptive rights shall exist in favour of non-selling BMRN shareholders; and

• Bannerman will assist in Epangelo’s capacity-building programs through secondments of Epangelo personnel to the Etango Project team and through education and training initiatives.

All technical due diligence has been completed to Epangelo’s satisfaction and efforts are now focused on finalising the full-form documentation and Epangelo’s financing arrangements.

Exploration

Etango Licence (Bannerman 80%)

The Etango Exclusive Prospecting Licence (EPL 3345) covers an area of approximately 500km[2] and contains numerous known uranium occurrences including the Etango deposit. During the quarter, Bannerman completed an 11 hole (1,610 metres) drilling program on the deeper levels in the Anomaly A area of the Etango deposit. This drilling followed the successful drilling program in the Onkelo West area of the northern part of the Etango deposit, as reported in the previous quarter.

The drilling completed during the June quarter focused on areas immediately below the current Mineral Resource boundary to test the potential for deeper repeats of the existing granite (alaskite) hosted mineralised zones.

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The drilling targeted the alaskites in close proximity to the Khan/Chuos contact where higher grade mineralisation is expected. The most significant results received are listed below and all mineralised intercepts from the program are tabulated in the Table in the Attachment:

• 62m @ 212ppm U3O8 from 382m (GARC0233) including 7m @ 666ppm U3O8

• 20m @ 232ppm U3O8 from 364m (GARC0248)

• 23m @ 250ppm U3O8 from 409m (GARC0395)

• 44m @ 214ppm U3O8 from 338m (GARC0418) including 6m @ 677ppm U3O8

• 49m @ 284ppm U3O8 from 388m (GARC0418) including 8m @ 656ppm U3O8

• 27m @ 377ppm U3O8 from 455m (GARC0418)

• 17m @ 246ppm U3O8 from 414m (GARC0130) including 2m @ 685ppm and 2m @ 557ppm U3O8

• 25m @ 279ppm U3O8 from 446m (GARC0130) including 3m @ 557ppm and 3m @ 797ppm U3O8

• 31m @ 237ppm U3O8 from 230m (GARC0431) including 3m @ 668ppm and 4m @ 374ppm U3O8

All drillholes were extensions of historical RC drillholes and consistently intersected broad zones of mineralisation both up and down dip from the previous results and in some areas extended the strike extension of the mineralisation. Refer Figures 1-3 in the Attachment.

Importantly, the drilling has confirmed the potential for extensions of the existing Mineral Resource to the west and immediately below the DFS open pit mine design, and the potential for mine life extensions well beyond the current 16 year modelled mine life.

Uranium Market

It is now well over one year since the tragic natural disasters in Japan in March 2011 and the resultant operating issues with the Fukushima Daiichi nuclear power facility. Uranium spot and long term contract prices have been stagnant over the last six months, reflecting the comments and actions of certain governments regarding the suspension or slow-down of their nuclear power build programs, as well as the availability of secondary supplies.

Key events during the quarter support Bannerman’s view of future higher uranium prices, including:

• Japan – On 15 June 2012, Japanese Prime Minister Yoshihiko Noda officially approved the re-start of two reactors at the Ohi nuclear power station in Fukui Prefecture, being the first two commercial reactors to return to service since the Fukushima incident. The re-starting of Japan’s reactors represents a key short term catalyst for the uranium market;

• China’s commitment to nuclear power – In June 2012 the Chinese government announced three major actions with respect to its nuclear energy program. Firstly, the release of a long awaited safety plan that will result in the lifting of a moratorium on new nuclear reactor projects. China now plans to have a total output of 60-70 GWe by 2020, an increase from the 40 GWe target set in 2006. Secondly, it was announced that Chinese state-owned nuclear entity China National Nuclear Power, the country’s largest nuclear reactor developer, would list on the Hong Kong Stock Exchange via an initial public offering to raise over US$20 billion to fund its construction programs. Thirdly, the Chinese Government announced a list of seven strategic industry initiatives to counter a down turn in economic growth, one being the construction of new nuclear power plants.

• Secondary uranium supplies - The world’s current annual uranium production is significantly less than annual demand from nuclear power utilities, with the shortfall presently satisfied through the sale of uranium from inventories and secondary sources. A key secondary source has been the 1993 ”Megatons to Megawatts” program between Russia and the USA for the down-blending of highly enriched uranium from dismantled Russian nuclear warheads. This program is due to end in 2013 and is unlikely to be renewed at its present volumes;

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• Incentive prices for new mine development – In addition to the impact of reducing secondary supplies, Bannerman believes that as a result of the complexity and long lead time of expanding existing operating mines and bringing new uranium mines into production, new production sources are unlikely to come on stream at the costs and to the extent currently anticipated by market participants. In addition, existing uranium producers are also experiencing production and economic challenges. Mining of uranium is subject to many of the same cost pressures as other mining operations but, unlike other commodities, uranium mining carries significantly increased environmental and safety management obligations and associated development timeframes. The development of new mines and the expansion of existing operations will, in Bannerman’s view, require higher uranium prices to incentivise development and expansion commitments. Bannerman has researched the escalation of cost estimates in various uranium mining projects, and the clear trend is for significant operating and capital cost increases as projects are progressed through their feasibility assessment phases.

Corporate

Cash Position

The Company’s cash reserves as at 30 June 2012 totalled A$9.6 million (31 March 2012: A$13.2 million). Expenditure will now be significantly lower following completion of the Etango project DFS and the Company is committed to prudent cash management in the current weak equity market environment.

Bannerman Board Changes

Ian Burvill was appointed as a Non-Executive Director on 14 June 2012, replacing Mason Hills who retired due to relocation overseas.

Mr Burvill is a Senior Vice President of private equity fund manager Resource Capital Funds (“ RCF ”) and has over 25 years of mining industry experience. In 2001, Mr Burvill opened the Australian office of RCF and has since been involved in the provision of equity finance to numerous resources development and mining companies. In representing RCF, Mr Burvill has acted as a non-executive director of numerous mining companies.

Management Change

A search for a replacement CFO is underway following the incumbent’s resignation with effect from early September, and an appointment is expected to be made shortly.

Issued Securities

The Company’s issued share capital as at 30 June 2012 comprised 297,244,208 ordinary shares. Shortly after the end of the quarter, Bannerman issued 1,329,680 shares to RCF as payment of interest on the existing A$8 million convertible note, in accordance with shareholder approval received in March 2012. At the date of this Quarterly Activities report, the Company has 302,000,580 shares on issue.

In addition, Bannerman currently has on issue 6,879,215 performance rights issued under the shareholder-approved Employee Incentive Plan (“ EIP ”) and Non-Executive Director Share Incentive Plan, and 14,129,950 unlisted options. The EIP performance rights are subject to various performance targets and continuous employment periods. The options, some of which also have related performance targets and continuous employment periods, have a weighted average exercise price of A$1.13 per share.

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For further information please contact:

Len Jubber Tim Haughan Chief Executive Officer Investor Relations Manager Perth, Western Australia Perth, Western Australia Tel: +61 (0)8 9381 1436 Tel: +61 (0)8 9381 1436 thaughan@bannermanresources.com.au

Media Spyros Karellas David Tasker Investor Relations Professional Public Relations Toronto, Ontario, Canada Tel: +61 (0)433 112 936 Tel: +1 416 800 8921 david.tasker@ppr.com.au spyros@pinnaclecapitalmarkets.ca

About Bannerman - Bannerman Resources Limited is an emerging uranium development company with uranium interests in Namibia, a southern African country which is a premier uranium mining jurisdiction. Bannerman’s principal asset is its 80%-owned Etango Project situated southwest of Rio Tinto’s Rössing uranium mine and to the west of Paladin Energy’s Langer-Heinrich mine. Etango is one of the world’s largest undeveloped uranium deposits. Bannerman is focused on the development of a large open pit uranium operation at Etango. More information is available on Bannerman’s website at www.bannermanresources.com.

Technical Disclosures

Certain disclosures in this report, including management's assessment of Bannerman’s plans and projects, constitute forward looking statements that are subject to numerous risks, uncertainties and other factors relating to Bannerman’s operation as a mineral development company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Full descriptions of these risks can be found in Bannerman’s various statutory reports, including its Annual Information Form available on the SEDAR website, sedar.com. Readers are cautioned not to place undue reliance on forward-looking statements. Bannerman expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Mineral Resources which are not Ore Reserves do not have demonstrated economic viability.

Bannerman Resources Limited (“Bannerman”) manages its drilling and assaying activities in accordance with industry standard quality assurance/quality control (QA/QC) procedures. Samples are collected by Bannerman personnel and prepared in accordance with specified procedures at the relevant assay laboratories. Drill samples were analysed for uranium by the Bureau Veritas Laboratory in Swakopmund, Namibia. Bureau Veritas is an International Laboratory Group with operations in 140 countries, including Ultratrace and Amdel in Australia. Assay QA/QC involves the use of assay standards (sourced from African Mineral Standards (AMIS) in Johannesburg, made from Bannerman pulp rejects and cross-checked through umpire laboratories for which the round robin reports are available), field duplicates, blanks and barren quartz flushes. A third party “umpire” laboratory (Genalysis in Perth) is used to cross-check and validate approximately 5% of the assay results in accordance with standard procedures. Sample coarse rejects are retained and approximately 5% of samples are re-submitted for further assay verification. All sample pulps, half-core and rock-chip samples are retained at Bannerman’s Goanikontes Warehouse Facility (GWS) on site.

The information in this report that relates to the exploration results of the projects owned by Bannerman is based on information compiled by Mr Martinus Prinsloo, Exploration Superintendent of Bannerman. Mr Prinsloo is a Member and a Chartered Professional of the Australasian Institute of Mining and Metallurgy, a Recognised Professional Organisation by the Australasian Joint Ore Reserves Committee, who has sufficient experience relevant to the style of mineralisation and types of deposits under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” and as a Qualified Person for purposes of National Instrument 43-101 of the Canadian Securities Administrators. Mr Prinsloo consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report relating to the Mineral Resources of the Etango Project is based on a resource estimate compiled or reviewed by Mr Brian Wolfe, a full time employee of Coffey Mining Pty Ltd. Mr Wolfe is a Member of the Australian Institute of Geoscientists and has sufficient experience relevant to the style of mineralisation and types of deposits under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”, and is an independent consultant to Bannerman and a Qualified Person as defined by Canadian National Instrument 43-101. Mr Wolfe consents, and provides corporate consent for Coffey Mining Pty Ltd, to the inclusion in this report of the matters based on his information in the form and context in which it appears.

The information in this report relating to the Ore Reserves of the Etango Project is based on information compiled or reviewed by Mr Harry Warries, a full time employee of Coffey Mining Pty Ltd. Mr Warries is a Fellow of The Australasian Institute of Mining and Metallurgy and has sufficient experience relevant to the style of mineralisation and types of deposits under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”, and is an independent consultant to Bannerman and a Qualified Person as defined by Canadian National Instrument 43-101. Mr Warries consents, and provides corporate consent for Coffey Mining Pty Ltd, to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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ATTACHMENT

Etango Uranium Deposit Drilling Results June 2012 Quarter

Hole ID	North	East	Dip	Azimuth	From (m)	To (m)	Interval (m)	U3O8 (ppm)
GARC0130 Including Including GARC0130 GARC0130 Including Including	7488600	482267	-60	90	414 414 427 434 446 450 468	431 416 429 444 471 453 471	17 2 2 10 25 3 3	246 685 557 137 279 557 797
GARC0212 GARC0212	7487900	482100	-60	90	415 449	443 466	28 17	151 106
GARC0233 Including GARC0233 Including	7487700	482230	-60	90	346 347 382 424	376 350 444 431	30 3 62 7	177 489 212 666
GARC0234 Including GARC0234	7487600	482260	-60	90	364 374 385	376 376 398	12 2 13	223 631 115
GARC0235	7487700	482100	-60	90	448	494	46	167
GARC0236	7487600	482150	-60	90	-	-	-	-
GARC0248	7487500	482495	-60	90	364	384	20	232
GARC0395 Including	7488750	482236	-60	90	409 429	432 431	23 2	250 480
GARC0418 Including GARC0418 Including Including GARC0418	7487750	482329	-60	90	338 388 388 435 455 455	382 394 437 437 463 482	44 6 49 2 8 27	214 677 284 471 656 377
GARC0431 Including Including GARC0431	7487250	482507	-60	90	230 250 256 311	261 253 260 331	31 3 4 20	237 668 374 188
GARC0460	7488650	482100	-60	90	456	484	28	176

Notes to the drilling results table:

1. Reported drilling is by the reverse circulation (RC) drilling method utilising 119-129mm diameter bits.

2. All holes intersected mineralisation but only those with intercepts in excess of 10 metres at 100ppm U3O8 with maximum 5m internal dilution are reported.

3. All reported intersections are downhole intervals, which are similar to true widths within the Etango deposit.

4. Sample intervals are all of 1.0 metre length in the RC drillholes.

5. Sample sizes of ±1.0kg are sent to the sample preparation assay laboratory and after pulverisation a 200g sub-sample is derived for analysis. From this, 20g is used for an analysis. All quoted assays are by reputable certified laboratories.

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Figure 1

Drillhole location plan for the June 2012 Quarter

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Figure 2 Section A-B showing the new drilling and the interpreted mineralisation extension

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Figure 3

Section C-D showing the new drilling and the interpreted mineralisation extension

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Etango Uranium Project Mineral Resource and Ore Reserve Estimates June 2012

(a) Mineral Resource Estimate

The Etango Project Mineral Resource estimate reported at a cut-off grade of 100ppm U3O8 was prepared by Coffey Mining and released in October 2010. The estimate comprises the following:

Mineral Resource	Measured	Measured	Measured	Indicated	Indicated	Indicated	Inferred	Inferred	Inferred
Deposit	Tonnes (Mt)	Grade (U3O8 ppm)	Contained U3O8 (Mlbs)	Tonnes (Mt)	Grade (U3O8 ppm)	Contained U3O8 (Mlbs)	Tonnes (Mt)	Grade (U3O8 ppm)	Contained U3O8 (Mlbs)
Etango Ondjamba Hyena	62.7	205	28.3	273.5	200	120.4	45.7 85.1 33.6	202 166 166	20.3 31.3 12.3
Total	62.7	205	28.3	273.5	200	120.4	164.4	176	63.9

The Mineral Resource estimate is reported at a cut-off grade of 100ppm U3O8. Refer to the Competent Persons Statement for further information. Figures may not add due to rounding.

The Etango Project Mineral Resource estimate is reported inclusive of Ore Reserves (refer below). In accordance with Canadian technical reporting requirements, it is noted that Mineral Resources which are not Ore Reserves do not have demonstrated economic viability.

(b) Ore Reserve Estimate

The maiden Ore Reserve estimate for the Etango Project of 279.6Mt at 194ppm for 119.3Mlbs U3O8 is drawn only from the existing Measured and Indicated Mineral Resources. The Ore Reserve estimate represents an 80% conversion rate from Measured and Indicated Resources.

Ore Reserve
		Proved			Probable			Total
Deposit	Tonnes (Mt)	Grade (U3O8 ppm)	Contained U3O8 (Mlbs)	Tonnes (Mt)	Grade (U3O8 ppm)	Contained U3O8 (Mlbs)	Tonnes (Mt)	Grade (U3O8 ppm)	Contained U3O8 (Mlbs)
Etango	64.2	194	27.4	215.3	193	91.8	279.6	194	119.3

Figures may not add due to rounding.

The Ore Reserve is stated at an effective date of April 2012 and was estimated in accordance with the standards and guidelines in the Australian JORC Code and Canadian National Instrument 43-101 with a modelled mining loss of 2.6% of metal, mining dilution of 4.9% of the total ore tonnes, a cut-off grade of 70ppm U3O8, a processing recovery of 84.5%, a metal price of US$75/lb U3O8 and the DFS cost estimates.

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