BLACK ROCK MINING LIMITED — Capital/Financing Update 2011

Mar 16, 2011

ASX Announcement

Company Announcements Office Australian Securities Exchange

By e-lodgement

17 March 2011

(ASX Code GRK)

Green Rock farms-in to Canning Basin hydrocarbon opportunity with significant targets in conventional and shale gas, with $4.2m capital raising under way

Highlights

• Green Rock will earn an initial 15% interest (with an ability to earn 20%) in permit EP 417 operated by New Standard Energy (NSE) in the Canning Basin in the Kimberley region of Western Australia

• Green Rock will partially fund the deepening and testing of the existing Lawford#1 well planned for third quarter 2011

• Deepening of the Lawford#1 well provides an attractive drilling target with large conventional gas (500Bcf+) and prospectivity for tight gas and shale gas

• NSE is at the advanced stage of obtaining the necessary approvals to drill and is in discussions (alongside other operators in the Canning Basin) to secure a suitable drilling rig

• Green Rock and NSE have also executed an Area of Mutual Interest Agreement to provide further opportunities in the Canning Basin, with Green Rock at 40%

• Exploration in the Canning Basin is set to increase significantly in 2011, particularly focusing on conventional, tight and shale gas. This is evidenced by the 3[rd] March announcement by Buru Energy (BRU)

• Cygnet Capital confirmed that it has received commitments for $1.17m through a placement of 65 million GRK shares at 1.8c/share

• On completion of the placement Green Rock intend to undertake a non-renounceable Rights Issue underwritten by Cygnet Capital on a 1:3 basis to raise a further $3.04m

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• Each share in the placement and Rights Issue will attach an option, subject to shareholder approval, exercisable at 3.6c/share prior to March 2013. Green Rock intends to apply for ASX listing of these options.

• Funds raised will be applied towards Green Rock’ EP417 commitments (expected to be about $2.1m in 2011) and also to priority geothermal projects.

Background

In June 2010 Green Rock Energy Limited (“Green Rock’) indicated that it would seek opportunities outside the geothermal sector that would build on the Directors’ skills and experience and provide increased opportunity for growing shareholder value. Green Rock considers that its geothermal opportunities, particularly in Western Australia and Hungary, are highly prospective and well positioned for development and we expect to make substantial progress on priority projects during 2011. The Canning Basin farm-in complements Green Rock’s existing business, draws on the Directors’ commercial and technical experience and builds on the Company’s good relationships with the Government, regulators and industry in WA.

Agreements with New Standard Energy (“NSE”)

Green Rock has executed a Farm-In Agreement with New Standard Energy Limited (“NSE”) to obtain an interest in Permit EP 417 in the Gregory sub-basin in the onshore Canning Basin in the Kimberley region of Western Australia – see the map attached. Current interests in EP 417 are NSE 65% (Operator) and Buru Energy Limited (ASX:BRU) (“Buru”) 35%.The farm-in is based on the funding of two wells. The first is a re-entry of the Lawford#1 well which was temporarily suspended at a depth of 1325m in November 2008 due to mechanical issues and the impending onset of the wet season. This re-entry is planned for the third quarter of this year and will involve drilling to about 2600m followed by coring sections of the tight gas sands and shales of the Laurel section – a regional source rock in the Fitzroy Trough. Analysis of the cored intervals will help in understanding of the prospecivity of the various zones, with fracture stimulation of the most attractive intervals considered if appropriate.

The second well will be drilled at another prospect within the Permit at a location and time to be agreed.

Green Rock’s participation secures funding for the deepening of the Lawford #1 well. NSE is well advanced in obtaining the necessary approvals to commence drilling in the third quarter of this year. NSE is currently in discussions (alongside other operators in the Canning Basin) to secure a suitable drilling rig. Buru’s 35% interest in EP417 provides a valuable ongoing partner in the drilling and testing of the Laurel play across EP417.

In addition to the EP417 farm-in, NSE and Green Rock have executed an agreement to jointly pursue additional new exploration opportunities within an Area of Mutual Interest (AMI). The parties will focus on areas that are prospective for unconventional hydrocarbons within the agreed AMI. Under the terms of the agreement, NSE will own 60% equity and operatorship in areas arising from the AMI while Green Rock Energy will own 40%. If applicable, further information on any additional areas arising from this AMI will be provided in due course.

Prospectivity of EP 417

The Lawford structure is very large so has the potential to host significant amounts of hydrocarbons in place. NSE estimates that Lawford could host in excess of 500Bcf of gas in place as a conventional target. In addition, the assessment of the Laurel shales and tight sands contained within the Lawford structure (but that extend regionally beyond the structural closure at Lawford) will provide important information and upside for an unconventional play across EP417 and the region.

Due diligence conducted by the international resources consultancy RPS engaged by Green Rock broadly supports NSE’s views of conventional resource volumes in the EP417 block and noted the “high risk, high return” typical of the Canning Basin.

Exploration in the Canning Basin is set to increase significantly over the next 12 months as evidenced by Buru’s ASX release on 3[rd] March 2011. The Lawford #1 deepening will contribute to this activity. The recent successful fracture stimulation of the Yulleroo-2 well by Buru helps to technically de-risk the Laurel play somewhat and although the two wells are a significant distance apart, provides encouragement for the deepening of the Lawford #1 well. Importantly the initial results of the testing program at Yulleroo-2 released by Buru indicate a component of condensate and LPG has flowed from the well. This supports NSE’s expectations that the Laurel play (which extends into EP417) could involve a valuable liquids rich component.

The Canning Basin

The Canning Basin covering an area of about 530,000km[2] has a long and varied exploration history which has so far resulted in limited production of oil from 5 fields. The Basin remains substantially under-explored with few valid structural tests. The drilling density is about one-tenth of the onshore Perth Basin. The Basin is regarded as “high risk, high return” territory with a significant part of the risk due to the sparseness of the data and in some cases its poor quality by current standards.

Given the shortage of domestic gas in WA, as well as the potential for exporting LNG from the Kimberley region, there is now growing interest in conventional and unconventional gas including shale gas in the Canning Basin.

Green Rock’s Director of Operations Adrian Larking said “These agreements with New Standard Energy provide Green Rock with an attractive entry into a region which we believe has substantial hydrocarbon potential at a time of heightened exploration activity. We will be working with companies well-experienced in the Canning Basin and highly motivated to prove its potential. The deepening of the Lawford#1 well planned for the third quarter of this year will be an early opportunity to better understand this very large and prospective structure.”

Consideration for Farm-In to EP 417

Green Rock will earn a 15% equity interest in all hydrocarbon rights across EP417 in return for the following:

1. Payment of $750,000 in back costs to NSE on the following terms:

   • $300,000 upon successful completion of the placement component of Green Rock’s capital raising;

   • $250,000 upon securing a drilling rig for the drilling of Lawford #1 well; and

   • $200,000 upon commencement of drilling the Lawford #1 well

2. Committing to funding 27.5% of the costs of the following:

   • completing the drilling and coring of Lawford #1 to a revised total depth of approximately 2,600m; and

   • fraccing and testing of the Lawford #1 well.

   • This funding will be subject to a cap of $4m on total costs following which any additional expenditure will be payable 15% by Green Rock.

In addition to the above, Green Rock commits to drilling a second well on EP417 (location and timing to be agreed but targeted for 2012) to earn an additional 5% equity interest (ie increase from 15% to 20%) in EP417 through committing to funding 22.5% of the following costs:

• drilling and coring a second well (at a location and time to be agreed); and

• fraccing and testing of the second well drilled.

• This funding will be subject to a cap of $10m on total costs following which any additional expenditure will be payable 20% by Green Rock

Expected costs including contingencies to Green Rock are approximately $2.1 million in 2011 and $2.5 million in 2012.

Capital Raising arranged by Cygnet Capital

Through Cygnet Capital, Green Rock is raising a total of $4.2m at 1.8c per share. This is an 18 % discount to the 2.2c closing price on 14[th] March 2011 before the trading halt was announced, and a 28 % discount to the volume weighted average price of Green Rock shares in the 20 trading days upto and including 14th March 2011 of 2.51c.

This capital raising is by way of a placement to sophisticated investors followed by a Rights Issue.

Cygnet Capital has confirmed commitments of $1.17m for 65 million shares in the placement, being 14.8% of the shares on issue at 14[th] March 2011.

Green Rock will undertake a non-renounceable rights issue underwritten by Cygnet Capital on a 1- for-3 basis to raise a further $3.04m. Green Rock will make an announcement on the rights issue timing, conditions and application process in due course.

Directors intend to participate in the rights issue.

Each share in the placement and rights Issue will attach an option (subject to shareholder approval of the issue of options, exercisable at 3.6c per share prior to March 2013. Green Rock intends to apply for ASX listing of these options.

All capital raised by Cygnet Capital will attract a 6% total fee being $253k plus GST on the full $4.2m raising. On completion of the placement Green Rock will issue to Cygnet Capital 5 million options on the same terms as above.

Net capital raised will be applied to the Canning Basin farm-in announced herein (about $2.1m) and to priority geothermal projects (about $1.8m).

Green Rock’s Managing Director Richard Beresford said “We expect this new project to provide a substantial opportunity to increase value for our shareholders. It builds on over one hundred years of resource development and commercialisation experience amongst our Directors and it complements our geothermal business. For example new understandings in fracture analysis, identification and development can help increase productivity of geothermal energy, tight gas and shale gas. Together with expected progress on our priority geothermal projects in Western Australia and Hungary, and with the ongoing support of Cygnet Capital, we can look forward to some exciting achievements for Green Rock in 2011.”

A map showing the location of EP 417 and more information on New Standard Energy is attached.

Nigel Hodder Company Secretary

Investors and Media

T: +61 (0) 9482 0482

E: info@greenrock.com.au

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About New Standard Energy

New Standard Energy (ASX:NSE) is a hydrocarbon developer with a mandate to explore for oil and gas.

Its exploration and drilling program is active, well funded and extensive. The company’s exploration program is underpinned and complemented by targeted corporate activity to take advantage of opportunities and to build an extensive pipeline of exploration projects.

New Standard’s board has extensive technical and commercial experience in the oil and gas sector.

New Standard currently has cash resources of approximately $2.1m (including pre-paid exploration costs in the US) and is progressing its oil and gas exploration portfolio focused on the Canning Basin in Western Australia and the onshore Gulf Coast region in Texas including:

• 100% operated interest in EP’s 443, 450, 451, 456 in Western Australia’s Canning Basin

• 100% operated interest in application areas 1/09-0, 2/09-0 and 5/09-0 in the Canning Basin

• 65% operated interest in EP417 in the Canning Basin (diluting to 50%)

• 100% operated interest in the Merlinleigh project, onshore Carnarvon Basin Western Australia

• 32.5% working interest in the Colorado County Project, onshore Texas USA

• 38.5% working interest in the Moeller Project, onshore Texas USA

• 36% working interest in the Wharton County Project, onshore Texas USA

• 32.5% interest in a license for 1,000 square miles of 3D seismic data

The company is pursuing conventional hydrocarbons in the United States and conventional hydrocarbons and shale gas in Australia.

In addition to the above New Standard has indirect exposure to a broad acreage position in the Canning Basin through a liquid 10% equity interest (18m shares) in listed Canning Basin explorer Buru Energy Ltd (ASX: BRU) and is actively assessing other opportunities to complement and expand its portfolio.