Brockman Mining Limited — Interim / Quarterly Report 2014

Apr 29, 2014

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Incorporated in Bermuda with limited liability SEHK Stock Code: 159 ASX Stock Code: BCK

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QUARTERLY REPORT For the quarter ended 31 March 2014

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QUARTERLY ACTIVITIES REPORT 31 March 2014

TABLE OF CONTENTS

1.	HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	CORPORATE REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	MARILLANA IRON ORE PROJECT (100% INTEREST). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
	3.1 Rail and port infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
4.	REGIONAL IRON ORE PROJECTS (100% INTEREST). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
	4.1 Ophthalmia Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
	4.2 Competent Person’s Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
	4.3 JORC 2012 TABLE 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
5.	TENEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
6.	DAMAJIANSHAN MINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
7.	TRANSPORT SERVICES BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
8.	CORPORATE PROFILE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
9.	GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
10.	APPENDIX 5B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23

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QUARTERLY ACTIVITIES REPORT 31 March 2014

1. HIGHLIGHTS

• Brockman has agreed to a court-ordered mediation, requested by The Pilbara Infrastructure Pty Ltd (TPI), to pursue a commercial resolution, which could include access or haulage. The mediation has been listed for 8 May 2014 before the Hon Chief Justice Martin, the Chief Justice of the Supreme Court of Western Australia.

• An updated Mineral Resource was issued on 10 March 2014 for the Sirius Deposit of the Ophthalmia Iron Ore Project. The 14% increase takes the Sirius resource to 124 Mt grading 60.32% Fe, including 105 Mt grading 60.35% Fe now in the Indicated category.

• On the back of this updated Mineral Resource, the Company commenced a Pre-Feasibility Study for a 15 Mtpa DSO mining operation at Ophthalmia, predicated on the Company achieving a rail and port infrastructure solution for the Marillana Project.

• The issue of 487,500,000 shares at an aggregate consideration of HK$195,000,000, the proceeds of which were used to repay an outstanding bond principal amount of US$4,000,000 (equivalent to approximately HK$31,200,000 at the date of issue) and to provide funds for the Group’s general working capital. The cash balance as at 31 March 2014 was HK$253.7 million.

• The increase in the Sirius resource takes the total resource for the Ophthalmia Project to 305 Mt grading 59.27% Fe, of which 200 Mt (or 66%) is classified as Indicated Resources, with the remainder classified as Inferred Resources.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

2. CORPORATE REVIEW

Cash position

The consolidated cash position of the Group as at 31 March 2014 was HK$253.7 million.

During the previous quarter, the Company issued an unsecured bond to Ocean Line (“the Bond”) with an outstanding principal amount of US$4,000,000 (equivalent to approximately HK$31,200,000 at the date of issue). The Bond was issued on 12 November 2013 to raise funds for the Group’s general working capital. The Bond was unsecured, bore an interest rate of 10% and was due on 28 November 2014.

On 2 January 2014, the Company and Ocean Line entered into a subscription agreement, pursuant to which the Company agreed to issue and Ocean Line agreed to subscribe for 292,500,000 shares at an aggregate subscription price of HK$117 million. The subscription was conditional upon, among other things, approval of the independent shareholders and the Stock Exchange granting listing of and permission to deal in the shares. The approval was obtained in February and the Bond was redeemed in full, with the proceeds from the redemption applied to subscribe for the shares. The shares were issued on 13 February 2014. The proceeds from the issue of the shares will be used for the development of the Group’s iron ore mining projects in Western Australia and for the general working capital of the Group.

Also on 2 January 2014, the Company and China Guoyin entered into a subscription agreement, pursuant to which the Company agreed to issue and China Guoyin agreed to subscribe for 195,000,000 shares at an aggregate subscription price of HK$78 million. The subscription was conditional upon, among other things, the approval of the independent shareholders

and the Stock Exchange granting listing of and permission to deal in the shares. The approval was obtained in February and the shares were issued on 13 February 2014. The proceeds from the issue of the shares will be used for the development of the Group’s iron ore mining projects in Western Australia and for the general working capital of the Group.

Changes in directorship

On 8 January 2014, Mr. Lau Kwok Kuen Eddie resigned as an independent nonexecutive director of the Company due to his own accord, and on the same date, Mr. Yap Fat Suan Henry was appointed as independent non-executive director to fill the vacancy.

On 13 March 2014 , Mr. Kwai Kwun Lawrence was appointed as an executive director of the Company.

3. M A R I L L A N A I R O N O R E PROJECT (100% INTEREST)

3.1 Rail and port infrastructure

Rail Access

Brockman is seeking access rights to The Pilbara Infrastructure Pty Ltd’s (“TPI’s”) below-rail infrastructure under the Western Australian Railways (Access) Code 2000 (“Code”), to allow it to haul up to 20 Mtpa of hematite iron ore product from its Marillana Iron Ore Project (“Marillana”), for a term of 20 years, to Port Hedland where North West Infrastructure (“NWI”) has a capacity allocation of 50 Mtpa for iron ore export from South West Creek in the Inner Harbour. Brockman proposes to procure the necessary spur lines and associated infrastructure to connect Marillana with the TPI railway and to connect it to the proposed NWI facilities in Port Hedland, which will include unloading, stockpiling and ship loading facilities in South West Creek, Port Hedland.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

Following determinations by the ERA, setting Floor and Ceiling Costs (“F&C Costs”) for the TPI railway and approving the conduct of negotiations between Brockman and TPI pursuant to section 10 of the Code, on 7 October, TPI commenced legal proceedings in the WA Supreme Court for a Judicial Review of the F&C Costs determination and the section 10 approval, and contemporaneously commenced an action challenging the validity of Brockman’s access proposal (Writ Action).

During the quarter, various procedural hearings occurred with respect to both the Writ Action and the Judicial Review, culminating in Brockman providing discovery on documents relating to the proceedings and TPI producing five expert reports covering both the Writ and Judicial Review matters. In mid-March, TPI filed an amended pleading that asserted a narrow interpretation of section 8(2) of the Code relating to the purpose for which a service could be sought and Brockman filed its responsive amended defence. The court made programming orders regarding the filing of witness statements and related matters with the matters being relisted for a directions hearing on 7 May.

The trial on both the Writ Action and the Judicial Review has since been listed for hearing between 18 August and 22 August inclusive.

Brockman is continuing to advance the preparation of submissions to satisfy TPI’s request regarding Brockman’s managerial and financial capability (section 14) and the availability of capacity (sections 15), as required under the Code. As part of that process, Brockman lodged an application with the Supreme Court for a mandatory injunction, seeking orders that TPI properly comply with its statutory obligations under the ‘request for information’ process under the Code, to provide original data relating

to train running times. During the quarter, TPI agreed to supply certain data. If the information provided by TPI is inadequate, Brockman will request the Court to set the matter down for a separate hearing in the month following the 7 May directions hearing and possibly seeking orders requiring further and better discovery of the digital (ITCS) records of train running times and related reports prior to any hearing.

Mediation

As part of the rail access proceedings, TPI has requested, and Brockman has agreed to, a court-ordered mediation.

Brockman will participate in the mediation as follows:

1. Mediation will not delay the trial date for the rail access proceedings;

2. The mediation would need to address a commercial solution, such as access or haulage; and

3. Those present at the mediation would need to have authority to conclude a commercial settlement.

The Supreme Court has confirmed that the mediation has been listed for one day on Thursday 8 May 2014, before the Hon Chief Justice Martin, the Chief Justice of the Supreme Court.

North West Infrastructure

NWI has continued to work on commercial terms with the Port Hedland Port Authority, for a lease and development agreement to govern the development of the proposed NWI port facilities in the Port Hedland harbour.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

4. R E G I O N A L I R O N O R E PROJECTS (100% INTEREST)

4.1 Ophthalmia Project

D u r i n g t h e q u a r t e r , t h e C o m p a n y announced a 14% increase in Mineral Resource for the Sirius Deposit, to take the resource to 124 Mt grading 60.32% Fe. (Refer announcement dated 10 March 2014). Significantly, the increase now includes Indicated Mineral Resources of 105 Mt grading 60.35% Fe. The Sirius Deposit forms part of the Ophthalmia Iron Ore

Project, located 15 km north of Newman (Figure 1). This increased confidence in the Project has led to the commencement of a Pre-Feasibility Study for a 15 Mtpa DSO mining operation at Ophthalmia, predicated on the Company achieving a rail and port infrastructure solution for the Marillana Project, located 80 km northwest of Ophthalmia. Further, the Company will also investigate the potential for a smaller, interim road-haulage operation based on the high grade, above water table mineralisation at Sirius.

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Figure 1: General location map of Ophthalmia Iron Ore Project

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QUARTERLY ACTIVITIES REPORT 31 March 2014

The upgraded Mineral Resource estimate for the Sirius Deposit was prepared by Golder Associates Pty Ltd (Golder) and included the 177 RC drill holes (14,840 m) completed in 2013. The resource estimate was classified in accordance with guidelines provided in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012). The classification was based principally on geological confidence, drill hole spacing and grade continuity from available drilling data. The mineralisation models and block reporting cut-off grades used in the in situ resource estimate are both 54% Fe.

The Mineral Resource estimate now incorporates the previously identified Exploration Targets at Sirius, almost all converted into Mineral Resources. No new Exploration Targets were identified during the drilling program or resource update.

This increase, when aggregated with the previously announced Mineral Resources for the Coondiner and Kalgan Creek Deposits1, released to the ASX on 19 April 2013 and 4 December 2012 respectively, brings the total DSO Mineral Resources at the Ophthalmia Project to 305 Mt grading 59.27% Fe (Table 1), of which 200 Mt (or 66%) is classified as Indicated Resources.

The methodology and procedures used for the Mineral Resource estimate, as well as the sampling techniques and data acquisition methods are provided in the Mineral Resource statement by Golder Associates Pty Ltd contained in the ASX announcement dated 10 March 2014. Brockman is not aware of any new information or data that materially affects the Mineral Resource. All material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

Table 1: Ophthalmia Mineral Resource (DSO) Summary

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Deposit Class Tonnes Fe CaFe SiO2 Al2O3 S P LOI
(Mt) (%) (%) (%) (%) (%) (%) (%)
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Deposit	Class	Tonnes (Mt)	Fe (%)	CaFe (%)*	SiO2 (%)	Al2O3 (%)	S (%)	P (%)	LOI (%)
	Indicated	12.5	59.25	62.64	4.02	4.79	0.007	0.20	5.41
Kalgan Creek 1	Inferred	39.7	59.07	62.55	4.53	4.55	0.005	0.17	5.56
	Sub Total	52.1	59.11	62.56	4.41	4.60	0.006	0.18	5.52
Coondiner 1	Indicated	82.5	58.1	61.7	5.61	4.48	0.008	0.17	5.76
(Pallas and	Inferred	46.4	58.7	62.1	5.37	4.40	0.006	0.18	5.44
Castor)	Sub Total	128.9	58.3	61.8	5.52	4.45	0.008	0.17	5.64
	Indicated	105.0	60.35	63.67	3.54	3.97	0.007	0.18	5.22
Sirius	Inferred	19.0	60.15	63.41	4.09	3.83	0.009	0.17	5.14
	Sub Total	124.0	60.32	63.63	3.62	3.95	0.007	0.18	5.20
Ohthli	Indicated	200.0	59.35	62.77	4.42	4.23	0.007	0.18	5.45
pama Project	Inferred	105.1	59.10	62.50	4.82	4.35	0.006	0.17	5.43
	Total	305.0	59.27	62.68	4.56	4.27	0.007	0.17	5.45

• CaFe represents calcined Fe and is calculated by Brockman using the formula CaFe = Fe%/((100-LOI)/100)

** Tonnes may not add up due to rounding

In the last quarterly report, it was reported that a short programme of HQ and PQ diamond drilling, comprising 439 m in 8 holes, was completed at Sirius in December. Drilling was designed to provide bulk metallurgical sample, geotechnical and structural data and twin hole assay data. The assay results from that drilling have demonstrated that the intersection grades and widths in the core holes compare very well with the twin RC holes, providing confidence in the quality of the RC drilling and sampling techniques. Results for the core holes and their RC twin holes are shown in Table 2.

Composite samples for metallurgical testwork have been prepared from the core and this work is in progress.

Reverse Circulation drilling recommenced a t O p h t h a l m i a i n e a r l y A p r i l . T h e programme is designed to upgrade the

majority of Inferred Resources at Coondiner and Kalgan Creek to Indicated Resources and to test for extensions of mineralisation.

Following the increased confidence in the Sirius Mineral Resource, the Company commenced a Pre-Feasibility Study for a 15 Mtpa DSO mining operation at Ophthalmia, predicated on the Company achieving a rail and port infrastructure s o l u t i o n f o r t h e M a r i l l a n a P r o j e c t , located 80 km northwest of Ophthalmia. Work undertaken to dates consists primarily of scheduling of approvals and commissioning of baseline environmental studies, risk management planning, recruitment and development of the study implementation plan. Expression of Interests for submission to proposed contractors, including assessment criteria, have been developed and issued, with appointment expected during the June quarter.

1 The Mineral Resources for Kalgan Creek and Coondiner were prepared and first disclosed under JORC Code 2004. Refer the ASX announcements made 16/10/2012 and 4/12/2012 respectively. Neither has been updated to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. All material assumptions and technical parameters, underpinning the estimates, continue to apply and have not materially changed, nor have the Competent Person’s findings been materially modified.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

Table 2 – Results of diamond hole twinning RC holes – Sirius Deposit – Ophthalmia Project

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Easting Northing Elev. Dip Azim. EOH From To Width Fe SiO2 Al2O3 P S LOI
Hole ID Hole Type
(m) (m) (m) (deg) (deg) (m) (m) (m) (m) (%) (%) (%) (%) (%) (%)
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Hole ID	Hole Type	Easting (m)	Northing (m)	Elev. (m)	Dip (deg)	Azim. (deg)	EOH (m)	From (m)	To (m)	Width (m)	Fe (%)	SiO2 (%)	Al2O3 (%)	P (%)	S (%)	LOI (%)
SDD009	Diamond	779,849	7,429,797	572	-65	180	81.5	2	78	76	62.61	2.16	2.74	0.19	0.004	4.61
SRC0054	RC	779,850	7,429,798	571	-65.7	177.8	132	0	80	80	61.61	3.05	2.74	0.19	0.005	4.96
SDD010	Diamond	780,246	7,430,001	567	-75	360	40	18	40	22	62.31	2.53	3.15	0.16	0.002	4.43
SRC0080	RC	780,246	7,430,000	566	-75	3.5	90	14	40	26	62.41	2.73	2.91	0.15	0.001	4.43
SDD011	Diamond	781,132	7,429,798	619	-90	0	76.8	16	72	56	59.87	4.90	4.02	0.16	0.003	4.71
SRC0153	RC	781,131	7,429,798	620	-87.1	264.2	91	16	72	56	61.07	3.65	3.50	0.17	0.002	4.71
SDD013	Diamond	780,950	7,429,345	568	-90	0	56.3	2	52	50	60.05	2.96	3.81	0.20	0.007	5.24
SRC0115	RC	780,947	7,429,349	568	-86.5	0	67	2	52	50	59.72	3.93	4.07	0.20	0.008	5.40
SDD014	Diamond	781,560	7,429,390	561	-90	0	54.5	4	52	48	60.70	2.97	4.03	0.19	0.003	5.08
SRC0045	RC	781,558	7,429,386	562	-90	0	127	2	50	48	59.85	4.29	4.14	0.18	0.008	5.26
SDD015	Diamond	781,328	7,429,245	563	-90	0	41.7	4	38	34	58.86	5.42	4.06	0.15	0.001	5.41
SRC0106	RC	781,325	7,429,244	562	-89.1	0	55	4	36	32	58.75	5.92	4.02	0.13	0.001	5.17
SDD016	Diamond	780,533	7,429,643	579	-90	0	40.7	14	40	26	63.10	1.31	2.73	0.22	0.006	4.86
SRC0011	RC	780,532	7,429,638	578	-90	0	169	14	40	26	62.34	1.92	3.02	0.17	0.009	5.06

Notes: SDD012 is abandoned due to sample recovery problems.

Intersections reported at 54% Fe lower cut-off grade, and include up to a maximum of 4 m of internal waste. Analyses by Nagrom Laboratories using XRF spectrometry.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

4.2 Competent Person’s Statement

The information in this report that relates to Mineral Resources at Coondiner and Kalgan Creek is based on information compiled by Mr James Farrell and Mr A Zhang.

Mr James Farrell, who is a Chartered P r o f e s s i o n a l a n d M e m b e r o f t h e Australasian Institute of Mining and Metallurgy and a full-time employee of Golder Associates Pty Ltd, produced the Mineral Resource estimates at Coondiner and Kalgan Creek based on the data and geological interpretations provided by Brockman. Mr Farrell has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves’. Mr Farrell consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.

Mr A Zhang, who is a Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Brockman Mining Australia Pty Ltd, provided the geological interpretations

and the drill hole data used for the Mineral Resource estimations at Coondiner and Kalgan Creek. Mr Zhang has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves’. Mr Zhang consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.

The information in this report that relates to Exploration Results is based on, and fairly represents information and supporting d o c u m e n t a t i o n c o m p i l e d b y M r A Zhang. Mr Zhang, who is a Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Brockman Mining Australia Pty Ltd, has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves’. Mr Zhang consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

4.3 JORC 2012 TABLE 1

Section 1 — Sampling Techniques and Data Ophthalmia Project

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Criteria Explanation
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Criteria	Explanation
Sampling techniques	• Sampling carried out under Brockman protocols and QAQC procedures as per industry best practice. • Reverse Circulation (RC) chip samples collected via a cone splitter mounted on the side of the drill rig. • For each two-metre interval the cone splitter produced two samples (A and B) collected into pre-numbered calico bags and a bulk sample collected in a pre-numbered polyweave bag. • Quality of sampling during drilling was continuously monitored by an experienced geologist and field assistant. • The diamond cores from the 2013 drilling programme were processed with whole-core method at 2m intervals (whole core was crushed before riffle-split to obtain the sub sample for assay).
Drilling techniques	• Reverse Circulation (RC) drilling employed a 140mm diameter face- sampling hammer. • The diamond holes were drilled with triple-tube method, including 6 HQ3 holes and one PQ3 hole (SDD015). The cores were not orientated due to the cores being incompetent. • Drill holes are spaced on a nominal 100m (E-W) by 50m (N-S) grid (Sirius) and 200m (E-W) by 100m (N-S) grid (Coondiner and Kalgan Creek).
Drill sample recovery	• RC sample recovery is recorded as a percentage (to the nearest 10%) by the geologist and is based on how much of the sample is returned from the cone splitter. • A geologist and field assistant were present during drilling to ensure that sample recovery was maximised and that samples were representative. Any issues were immediately rectified. • The core recovery was logged for the length of core recovered over the depth drilled. • No significant sample recovery issues in RC drilling were encountered. All diamond holes, except one hole (SDD012) which were abandoned due to poor recovery, has excellent recovery. • Twinned RC and diamond drill holes show comparable assay results indicating that wet drilling has not adversely affected the RC samples. • Previous metallurgical testing shows that assay results are similar across all size ranges.

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Criteria Explanation
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Criteria	Explanation
Logging	• Logging of RC holes was at 1m interval (Brockman procedure) corresponds with the 1m bulk samples recovered during RC drilling. This level of detail supports appropriate Mineral Resource estimation, mining studies and metallurgical studies. • Geophysical data were collected from the RC holes (natural gamma, gamma density, magnetic susceptibility & resistivity, and down-hole deviation) by Surtron Technologies. Not all holes were open at depth, which precluded 100% recovery of data from all of the drill holes. • Detailed geological, structural and geotechnical logging were carried out on all diamond cores.
Sub-sampling techniques and sample preparation	Sampling technique — RC samples • samples averaging about 3 kg each were collected for each two- metre interval via a cone splitter. • Samples were kept dry where possible. • The sample size is considered appropriate for correctly characterising the mineralisation, based on the style of mineralisation (massive goethite-hematite), the thickness and consistency of intersections, the sampling methodology and percent value assay ranges for the primary elements. Sampling technique — diamond core samples • 2m whole-core was crushed before riffle-split to produce a sub sample for assay. Sample preparation • Samples were dried at 105°C and weighed. • Samples were crushed to nominal—6.3 mm, with samples in excess of 2 kg being riffle split. • Samples were pulverised to 80% passing at 75�m. Quality control procedures • Field duplicate submitted every 25th sample (1:25). • ‘Blind’ Certified Reference Material inserted every 25th sample (1:25). • Lab duplicates were randomly generated by a laboratory program, typically about 1 in 20 samples (1:20). • Lab repeats were taken and standards inserted at a predetermined level specified by the lab.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

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Criteria Explanation
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Criteria	Explanation
Quality of assay data and laboratory tests	• All RC and diamond core samples submitted to Nagrom Laboratory in Perth were assayed for Fe, SiO2, Al2O3, TiO2, MnO, CaO, P, S, MgO, and K2O by XRF and for LOI at 1000°C by thermogravimetric analysis (TGA). • Laboratory procedures are in line with ISO9001 Quality Management System and appropriate for iron ore deposits. • Samples were dried at 105°C, weighed, crushed to a nominal—6.3mm size, and then pulverised to 80% passing 75 micron. • A 0.8g sub-sample was collected and fused in 8g of 12:22 lithium borate flux with 5% lithium nitrate additive. The resultant glass bead was analysed by XRF. • Another 1–2g sub-sample was dried and ignited at 1000°C with LOI calculated one constant mass was reached. LOI is the percentage mass change due to igniting the dry sample. • There were no indications that samples were unrepresentative, with all lab duplicate samples were within 2.5% of the original sample value. • Samples have been sent to an umpire laboratory as an independent check of the assay results. These results are pending. • Certified Reference Materials (CRMs) with a range of values appropriate to the mineralisation were inserted at predefined intervals by Brockman and randomly by the lab at set levels. Results from the CRMs show that sample assay values are accurate and precise. • Analysis of field duplicate samples shows that greater than 95% of pairs have less than 5% difference. Analysis of lab pulp repeats indicates that the precision of samples is also within acceptable limits.
Verification of sampling and assaying	• Significant intersections have been independently verified by alternative company personnel. • The Competent Person has visited site and inspected the sampling process in the field, and has also inspected the laboratory. • Twinned RC and diamond drill holes show equivalent assay results. • Primary data are captured on Toughbook laptops using Ocris software. The software has validation routines to prevent data entry errors. • All field data were sent by the geologist present during drilling to a database management company (Expedio) in Perth and stored in a secure SQL database. • Assay data were sent by the laboratory direct to Expedio and uploaded into the SQL database. • No adjustments or calibrations were made to any assay data used in the estimate.

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QUARTERLY ACTIVITIES REPORT 31 March 2014

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Criteria Explanation
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Criteria	Explanation
Location of data points	• All collars were initially surveyed by Brockman personnel using a hand held GPS, and later by Bore Hole Geophysical Services using a differential GPS with an nominal horizontal and vertical accuracy of 15cm. • Down-hole gyroscopic surveys were conducted by Surtron Technologies using a conventional gyroscope. • The grid system for Sirius is MGA_GDA94 Zone 50 and the vertical datum is AHD. • A DEM for the project area was acquired by Fugro Spatial Solutions with a quoted horizontal accuracy of 60 cm and a vertical accuracy of 30 cm.
Data spacing and distribution	• Drill holes are spaced on a nominal 100m (E-W) by 50m (N-S) grid (Sirius) and 200m (E-W) by 100m (N-S) grid (Coondiner and Kalgan Creek). • This drill spacing is sufficient to establish the degree of geological and grade continuity required under the 2012 JORC code. • Samples were collected at 2m intervals.
Orientation of data in relation to geological structure	• Lithological units strike east-southeast and are folded about a series of upright to slightly inclined, open to close folds. The mineralisation envelope is also folded. The majority of holes were either drilled vertically or at 50-75° to the north or south in order to be oriented perpendicular to mineralisation. • Owing to the rugged topography at Sirius, a small number of holes were drilled either partly along strike or down-dip in order to provide appropriate drill spacing. • Due to the varying intersection angles all results are defined as down- hole widths.
Sample security	• The chain of custody is managed by Brockman. • Samples were packed into polyweave bags and sealed, and then placed inside Bulka Bags which were sealed by the geologist and field assistant present during drilling. • Samples were picked up from site by a local transport company and deposited with Regal Transport, who delivered the samples to the laboratory. • Once received at the laboratory, the samples were sorted and securely stored until analysis. • The lab receipted samples received against the sample dispatch documents.
Audits or reviews	• The database is maintained by an independent external consultant. No third party audit has been conducted, but the internal integrity of the database was verified by Golder in late 2012/early 2013 during the Mineral Resource estimation.

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14

QUARTERLY ACTIVITIES REPORT 31 March 2014

Section 2 Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section.)

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Criteria Explanation
----- End of picture text -----

Criteria	Explanation
Mineral tenement and land tenure status	• Exploration Prospects are located wholly within Exploration Leases E47/1598 and E47/1599 which are 100% owned by Brockman. • The tenement lies within the Nyiyaparli Native Title Claim (WC05/06). • At the time of reporting, there are no known impediments to obtaining a licence to operate in the area, and the tenement is in good standing.
Exploration done by other parties	• No substantive previous exploration with the prospect area was identified by Brockman.
Geology	• Mineralisation at Sirius and Coondiner consists of hematite-goethite ore hosted within shaly BIF of the c. 2.49 Ga Boolgeeda Iron Formation (upper Hamersley Group). • The prospects are located within the Ophthalmia Fold Belt about 20- 35 km northwest of Newman.
Drill hole information	• Refer to the figures and Table of Significant Results.
Data aggregation methods	• A nominal 54% Fe lower cut-off grade was used for reporting of significant intercepts.
Relationship between mineralisation widths and intercept lengths	• Mineralisation at both Coondiner and Sirius defines a folded sub- horizontal sheet. Overall, most holes were drilled perpendicular to mineralisation, but because of the folding some holes are slightly or moderately oblique to mineralisation. Therefore, all results are defined as down-hole widths rather than true widths.
Diagrams	• Cross sections through the deposits with interpretations of the stratigraphy and mineralisation were provided in the ASX announcement of 10 March 2014.
Other substantive exploration data	• Detailed geological and structural mapping of the prospect has been completed by Brockman geologists. • Cross-sections through Sirius have been constructed in order to determine the structural and stratigraphic controls on mineralisation. • Logging of diamond drill core has been undertaken to determine the nature and relative timing of the mineralisation. • Preliminary metallurgical test work (size assaying and a single sinter test) has been undertaken.
Further work	• Pre-feasibility mining study of both rail and road transport has been in progress.

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15

QUARTERLY ACTIVITIES REPORT 31 March 2014

5. TENEMENTS

Tenements disposed of during the Quarter

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Tenement Interest
Project Location Type number Commodity Status held
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Project	Location	Type	Tenement number	Commodity	Status	Interest held
Bruten Hill	West Kimberley	E	04/2190	Coal	Application	0%*
Canning Basin	West Kimberley	E	04/2036	Coal	Granted	0%*
Canning Basin	West Kimberley	E	04/2037	Coal	Granted	0%*
Canning Basin	West Kimberley	E	04/2038	Coal	Granted	0%*
Canning Basin	West Kimberley	E	04/2039	Coal	Granted	0%*
Canning Basin	West Kimberley	E	04/2040	Coal	Granted	0%*
Canning Basin	West Kimberley	E	04/2258	Coal	Application	0%*
Canning Basin	West Kimberley	E	04/2302	Coal	Granted	0%*
Canning Basin	West Kimberley	E	04/2320	Coal	Application	0%*
Fitzroy River	West Kimberley	E	04/2066	Coal	Granted	0%*
Fitzroy River	West Kimberley	E	04/2067	Coal	Granted	0%*
Ophthalmia	East Pilbara	E	47/2621	Iron Ore	Application	0%
Yeeda	West Kimberley	E	04/2148	Coal	Granted	0%*

• Tenements were sold to 142 East Pty Ltd during the Quarter. The consideration for the transaction was a 50% shareholding in 142 East Pty Ltd.

Tenements acquired during the Quarter

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Tenement Interest
Project Location Type number Commodity Status held
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Project	Location	Type	Tenement number	Commodity	Status	Interest held
Duck Creek	West Pilbara	E	47/3104	Iron Ore	Application	100%
Irwin Hill	Goldfields	M	39/1090	Nickel/Cobalt	Application	40%
Irwin Hill	Goldfields	M	39/1091	Nickel/Cobalt	Application	40%
Irwin Hill	Goldfields	M	39/1092	Nickel/Cobalt	Application	40%
Mt Stevenson	West Pilbara	E	47/3105	Iron Ore	Application	100%
Vivash	East Pilbara	E	47/3064	Iron Ore	Application	100%
Vivash	East Pilbara	E	47/3065	Iron Ore	Application	100%
West Hamersley	West Pilbara	E	47/3054	Iron Ore	Application	100%

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16

QUARTERLY ACTIVITIES REPORT 31 March 2014

Tenements held at end of Quarter

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Tenement Interest
Project Location Type number Commodity Status held
Cheela Plains West Pilbara E 08/2264 Iron Ore Granted 100%
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Project	Location	Type	Tenement number	Commodity	Status	Interest held
Cheela Plains	West Pilbara	E	08/2264	Iron Ore	Granted	100%
Chichester Range	East Pilbara	E	45/3693	Iron Ore	Granted	100%
Duck Creek	West Pilbara	E	47/1725	Iron Ore	Granted	100%
Duck Creek	West Pilbara	E	47/1936	Iron Ore	Granted	100%
Duck Creek	West Pilbara	E	47/3104	Iron Ore	Application	100%
Ethel Creek	East Pilbara	E	46/0921	Iron Ore	Granted	100%
Ethel Creek	East Pilbara	E	46/0979	Iron Ore	Application	100%
Fig Tree	East Pilbara	E	47/3023	Iron Ore	Application	100%
Fig Tree	East Pilbara	E	47/3024	Iron Ore	Application	100%
Fig Tree	East Pilbara	E	47/3025	Iron Ore	Application	100%
Irwin Hills	Goldfields	E	39/1284	Nickel/Cobalt	Granted	40%
Irwin Hills	Goldfields	E	39/1307	Nickel/Cobalt	Granted	40%
Irwin Hills	Goldfields	E	39/1471	Nickel/Cobalt	Granted	40%
Irwin Hills	Goldfields	L	39/0163	Nickel/Cobalt	Granted	40%
Irwin Hills	Goldfields	P	39/4594	Nickel/Cobalt	Granted	40%
Irwin Hills	Goldfields	P	39/4595	Nickel/Cobalt	Granted	40%
Irwin Hills	Goldfields	P	39/4682	Nickel/Cobalt	Granted	40%
Irwin Hills	Goldfields	M	39/1088	Nickel/Cobalt	Application	40%
Irwin Hill	Goldfields	M	39/1090	Nickel/Cobalt	Application	40%
Irwin Hill	Goldfields	M	39/1091	Nickel/Cobalt	Application	40%
Irwin Hill	Goldfields	M	39/1092	Nickel/Cobalt	Application	40%
Lalla Rookh	North Pilbara	E	45/3144	Iron Ore	Granted	100%
Lalla Rookh	North Pilbara	E	45/3379	Iron Ore	Granted	100%
Lalla Rookh	North Pilbara	E	45/3380	Iron Ore	Granted	100%
Marillana	East Pilbara	E	47/1408	Iron Ore	Granted	100%
Marillana	East Pilbara	L	45/0236	Iron Ore	Application	100%
Marillana	East Pilbara	L	45/0238	Iron Ore	Application	100%
Marillana	East Pilbara	L	46/0097	Iron Ore	Application	100%
Marillana	East Pilbara	L	47/0369	Iron Ore	Application	100%
Marillana	East Pilbara	L	47/0389	Iron Ore	Application	100%
Marillana	East Pilbara	L	47/0408	Iron Ore	Application	100%
Marillana	East Pilbara	L	47/0544	Iron Ore	Application	100%
Marillana	East Pilbara	L	47/0566	Iron Ore	Application	100%
Marillana	East Pilbara	L	47/0567	Iron Ore	Application	100%
Marillana	East Pilbara	L	52/0124	Iron Ore	Application	100%
Marillana	East Pilbara	M	47/1414	Iron Ore	Granted	100%
Marillana	East Pilbara	E	47/2176	Iron Ore	Application	100%
Millstream Hill	East Pilbara	E	47/2766	Iron Ore	Application	100%
Mt Goldsworthy	North Pilbara	E	45/3931	Iron Ore	Granted	100%
Mt Lockyer	North Pilbara	E	47/2650	Iron Ore	Application	100%
Mt Stevenson	West Pilbara	E	47/3105	Iron Ore	Application	100%

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QUARTERLY ACTIVITIES REPORT 31 March 2014

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Tenement Interest
Project Location Type number Commodity Status held
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Project	Location	Type	Tenement number	Commodity	Status	Interest held
Mt Stuart	West Pilbara	E	47/1845	Iron Ore	Granted	100%
Mt Stuart	West Pilbara	E	47/1850	Iron Ore	Granted	100%
Mt Stuart	West Pilbara	E	47/2215	Iron Ore	Granted	100%
Mt Stuart	West Pilbara	E	47/2976	Iron Ore	Application	100%
Mt Stuart	West Pilbara	E	47/2993	Iron Ore	Application	100%
Mt Stuart	West Pilbara	E	47/2994	Iron Ore	Application	100%
Mt Stuart	West Pilbara	P	47/1711	Iron Ore	Application	100%
Mt Stuart	West Pilbara	P	47/1712	Iron Ore	Application	100%
Mt Stuart	West Pilbara	P	47/1713	Iron Ore	Application	100%
Mt Stuart	West Pilbara	P	47/1714	Iron Ore	Application	100%
Nimingara	North Pilbara	E	45/4051	Iron Ore	Application	100%
Ophthalmia	East Pilbara	E	47/1598	Iron Ore	Granted	100%
Ophthalmia	East Pilbara	E	47/1599	Iron Ore	Granted	100%
Ophthalmia	East Pilbara	E	47/2622	Iron Ore	Application	100%
Ophthalmia	East Pilbara	E	47/2623	Iron Ore	Application	100%
Ophthalmia	East Pilbara	E	47/2280	Iron Ore	Granted	100%
Ophthalmia	East Pilbara	E	47/2291	Iron Ore	Granted	100%
Ophthalmia	East Pilbara	E	47/2594	Iron Ore	Granted	100%
Ophthalmia	East Pilbara	P	47/1715	Iron Ore	Application	100%
Pannawonica	West Pilbara	E	47/2409	Iron Ore	Granted	100%
Pannawonica	West Pilbara	E	47/2410	Iron Ore	Granted	100%
Paraburdoo	West Pilbara	E	47/1942	Iron Ore	Granted	100%
Paraburdoo	West Pilbara	E	47/2081	Iron Ore	Granted	100%
Pippingarra	North Pilbara	E	45/3948	Iron Ore	Granted	100%
Port Hedland	North Pilbara	E	45/3939	Iron Ore	Application	100%
Port Hedland	North Pilbara	L	45/0296	Iron Ore	Application	100%
Red Hill	West Pilbara	E	08/2011	Iron Ore	Granted	100%
Red Hill	West Pilbara	E	08/2297	Iron Ore	Granted	100%
Red Hill	West Pilbara	P	08/0628	Iron Ore	Granted	100%
Red Hill	West Pilbara	P	08/0629	Iron Ore	Granted	100%
Shovelanna	East Pilbara	E	46/0781	Iron Ore	Granted	100%
Shovelanna	East Pilbara	E	52/2238	Iron Ore	Granted	100%
Tom Price	West Pilbara	E	47/2098	Iron Ore	Granted	100%
Tom Price	West Pilbara	E	47/2353	Iron Ore	Application	100%
Tom Price	West Pilbara	E	47/2354	Iron Ore	Application	100%

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18

QUARTERLY ACTIVITIES REPORT 31 March 2014

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Tenement Interest
Project Location Type number Commodity Status held
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Project	Location	Type	Tenement number	Commodity	Status	Interest held
Tom Price	West Pilbara	E	47/2455	Iron Ore	Application	100%
Tom Price	West Pilbara	E	47/2698	Iron Ore	Application	100%
Tom Price	West Pilbara	E	47/2699	Iron Ore	Application	100%
Tom Price	West Pilbara	E	47/2700	Iron Ore	Application	100%
Vivash	East Pilbara	E	47/3064	Iron Ore	Application	100%
Vivash	East Pilbara	E	47/3065	Iron Ore	Application	100%
West Hamersley	West Pilbara	E	47/1603	Iron Ore	Granted	100%
West Hamersley	West Pilbara	E	47/2667	Iron Ore	Application	100%
West Hamersley	West Pilbara	E	47/2904	Iron Ore	Application	100%
West Hamersley	West Pilbara	E	47/2905	Iron Ore	Application	100%
West Hamersley	West Pilbara	E	47/3054	Iron Ore	Application	100%
Western Gate Well	West Pilbara	E	45/4240	Iron Ore	Application	100%

6. DAMAJIANSHAN MINE

During the quarter ended 31 March 2014, cash receipts from product sales of approximately RMB9.6 million (RMB13.7 million, December 2013 quarter) were recorded.

Cash payments for production associated with mining operations during the quarter amounted to approximately RMB6.6 million (RMB9.4 million, December 2013 quarter).

S e a s o n a l r e d u c t i o n s i n s a l e s a n d production activities were noted as the first quarter of the year coincides with the long Chinese New Year holidays.

Cash payments for exploration activities and development recorded at RMB1.4 million (RMB1.8 million, December 2013). Drilling activities were continued during the quarter with approximately 322m recorded (270m, December 2013 quarter).

	Mar’ 14 Quarter (Tonnes)	Dec’ 13 Quarter (Tonnes)	Variance %
Ore mined and delivered to stockpile	12,608	53,113	(76)%
Ore processed	7,864	56,467	(86)%
Concentrate produced (metal tonnes)	55	304	(82)%
Concentrate sold (metal tonnes)	126	337	(63)%

Note:

Recognition of copper concentrate metal tonnes is based on the most recent available information with a subsequent adjustment made upon final determination.

On 24 October 2013, the Group has entered into a series of agreements with the 10% owner of Damajianshan Mine to acquire 10% remaining interest in the copper mine for a consideration of HK$45 million. The transaction was completed on 21 February 2014 and the Group then owns 100% equity interest in the copper mine.

Mining license

The temporarily mining right certificate has been obtained in June 2013 and such license granted an extension of the mining right in Damajianshan Mine for one year, and will expire in June 2014.

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19

QUARTERLY ACTIVITIES REPORT 31 March 2014

With reference to an independent legal opinion received by Luchun Xingtai Mining Co., Ltd (“Luchun”), a subsidiary of the Company in February 2014, there is no legal barrier for Luchun to renew to renew its mining right certificate when it expires. Accordingly, the Directors are of the opinion that the Group will be able to renew the mining right certificate continuously at minimal charge.

7. T R A N S P O R T S E R V I C E S BUSINESS

On 24 October 2013, the Group has entered into a sale and purchase agreement with a director of Perryville Group Limited to sell its entire interest in transportation service business. The disposal was completed on 19 February 2014 and Perryville Group Limited ceased to be a subsidiary of the Group.

8. CORPORATE PROFILE

Brockman Mining Limited

ARBN 143 211 867

Non-executive Directors:

Kwai Sze Hoi (Chairman) Liu Zhengui (Vice Chairman) Ross Stewart Norgard

Executive Directors:

Luk Kin Peter Joseph (CEO)

Chan Kam Kwan Jason

Kwai Kwun Lawrence (appointed 13 March 2014)

Warren Talbot Beckwith

Independent Non-executive Directors:

Lau Kwok Kuen Eddie (resigned 8 January 2014)

Uwe Henke Von Parpart

Yip Kwok Cheung Danny

Yap Henry Fat Suan (appointed 8 January 2014)

Company Secretary

Chan Kam Kwan Jason

Registrars

Principal Share Registrars and Transfer Office

MUFG Fund Services (Bermuda) Limited 26 Burnaby Street Hamilton HM 11

Bermuda

Branch Share Registrars and Transfer Office — Hong Kong

Tricor Secretaries Limited Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong

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20

QUARTERLY ACTIVITIES REPORT 31 March 2014

Branch Share Registrars and Transfer Office — Australia

Computershare Investor Services Pty Limited Reserve Bank Building Level 2, 45 St George’s Terrace Perth, Western Australia, 6000

Securities on issue at 31 March 2014 Quoted securities

8,381,982,131 fully paid shares on issue 15,000,000 options quoted, expiring 30 September 2014

Unquoted securities

• 420,300,000 unlisted options granted

• 83,400,000 share options, expiring 13 December 2015 EX HK$0.72

• — 88,100,000 share options, expiring 14 January 2016 EX HK$0.717

• 88,100,000 share options, expiring 14 January 2016 EX HK$0.967

• 3,750,000 share options, expiring 28 February 2016 EX HK$0.967

• 76,600,000 share options, expiring 20 May 2016 EX HK$0.717

• — 76,600,000 share options, expiring 20 May 2016 EX HK$0.967

A total of 487,500,000 shares were issued during the quarter.

The following options lapsed during the period:

• 7,500,000 share options, expired 17 January 2014 EX HK$1.164

• — 27,000,000 share options, expired 10 February 2014 EX HK$1.240

By order of the Board of Directors of Brockman Mining Limited Chan Kam Kwan, Jason Company Secretary, Hong Kong

• 3,750,000 share options, expiring 28 February 2016 EX HK$0.717

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21

QUARTERLY ACTIVITIES REPORT 31 March 2014

9. GLOSSARY

“ASX”

“Board” “Bond”

ASX Limited ACN 008 624 691, or the financial products market, The Australian Securities Exchange, as the situation requires

the Board of Directors

The unsecured bond due 28 November 2014, issued by the Company to Ocean Line with an outstanding principal amount of US$4,000,000 (equivalent to approximately HK$31,200,000)

“Brockman” or Brockman Mining Limited ARBN 143 211 867, a company incorporated “Company” in Bermuda and listed on the SEHK and ASX “China Guoyin” China Guoyin Investments (HK) Ltd “Damajianshan Mine” A copper mine located in the Yunnan Province, PRC, in which the Company has 100% equity interest “DSO” Direct Shipping Ore

“Group” Brockman Mining Limited, its associates and subsidiaries “JORC” Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves

“km” kilometres “Marillana Project” The 100% owned Marillana iron ore project is Brockman’s flagship project located in the Hamersley Iron Province

• “m” metre

• “Mt” million tonnes

“NWI” North West Infrastructure, the joint venture company which represents the interests of its three shareholder companies: Brockman Mining Australia Pty Ltd; Atlas Iron Limited and FerrAus Limited, to facilitate the construction of a port facility capable of annually exporting 50 million tonnes of iron ore from the South-West Creek location at the Inner Harbour at Port Hedland, Western Australia

“Ocean Line” Ocean Line Holdings Limited

“Ophthalmia Project”

The 100% owned Ophthalmia iron ore project is located 80 km south of the Marillana Project

“PHPA” Port Hedland Port Authority

“Q” Quarter (financial) “Stock Exchange” The Stock Exchange of Hong Kong Limited

“T” Tonne(s)

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22

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013

Name of entity

Name of entity
BROCKMAN MINING LIMITED
ABN ARBN 143 211 867
ARBN 143 211 867	31 March 2014

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 1.3 1.4 1.5 1.6 1.7 Payments for (a) exploration & evaluation (b) development (c) production (d) administration Dividends received Interest and other items of a similar nature received Interest and other costs of finance paid Income taxes paid Other (provide details if material) 1.7 (a) Receipts from transport services 1.7 (b) Net advance from related parties Net Operating Cash Flows	Current quarter HK$’000	Restated Year to date (9 months) HK$’000
	12,147 (20,608) — (8,411) (35,144) — 1,276 (15) 854 16,834 127	46,216 (67,455) — (31,376) (124,688) — 4,775 (105) 854 72,972 1,285
	(32,940)	(97,522)
Cash flows related to investing activities 1.8 1.9 1.10 1.11 1.12 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets Loans to other entities Loans repaid by other entities Other (provide details if material) Net investing cash flows	— (81,469) (132) — 34,000 — — —	— (81,469) (1,625) 177 34,000 529 — — —
	(47,601)	(48,388)

• See chapter 19 for defined terms.

01/05/2013 Appendix 5B Page 23

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(80,541)	(145,910)
Cash flows related to financing activities 1.14 1.15 1.16 1.17 1.18 1.19 Proceeds from issues of shares, options, etc. Proceeds from sale of forfeited shares Proceeds from borrowings Repayment of borrowings Dividends paid Other (provide details if material) 1.19(a) Acquisition of additional interest in a subsidiary 1.19(b) Proceeds from assignment of debt 1.19(c) Proceeds from issue of bond 1.19(d) Cash backed performance bond guarantee Net financing cash flows	163,800 — — (638) — (45,000) 11,000 — —	163,800 — — (4,998) — (45,000) 11,000 31,200 2,010
	129,162	158,012
1.20 1.21 Net increase in cash held Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20 Cash and cash equivalents included in assets of disposal group 1.22 Cash at end of quarter	48,621 211,888 2,346 (9,111)	12,102 252,564 (1,811) (9,111)
	253,744	253,744

Payments to directors of the entity, associates of the directors, 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 HK$’000
	4,918
	—

• 1.25 Explanation necessary for an understanding of the transactions

1.23 Being payment of executive directors’ salary and non-executive directors’ fees. 1.2(d) Includes the human resources service fees of HK$96,000 paid to a company in which a director of the company has beneficial interest.

• See chapter 19 for defined terms.

Appendix 5B Page 24

01/05/2013

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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

On 2 January 2014, the Company has entered shares subscription agreements with two substantial shareholders, China Guoyin Investments (HK) Ltd (“China Guoyin”) and Ocean Line Holdings Limited (“Ocean Line”) for share subscription at an aggregate amount of HK$78 million and HK$117 million respectively. The subscription price is HK$0.40 per share.

Pursuant to the share subscription agreement with Ocean Line, part of the net proceeds from the share subscription was used to redeem the fixed rate bond of US$4 million (equivalent to approximately HK$31.2 million) in full. On 13 February 2014, a total of 195,000,000 and 292,500,000 ordinary shares were issued to China Guoyin and Ocean Line respectively with net proceeds from share subscription at HK163.8 million (being total subscription price of HK$195 million, net of the principal amount of bond of US$4 million).

• 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

Nil

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standbyarrangements	Amount available HK$’000	Amount used HK$’000
	—	—
	—	—

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	HK$’000
	(22,764)
	—
	(6,885)
	(16,998)
Total	(46,647)

• See chapter 19 for defined terms.

01/05/2013 Appendix 5B Page 25

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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 HK$’000	Previous quarter HK$’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other(provide details)	176,874	92,863
	76,870	119,025
	—	—
	—	—
Total: cash at end ofquarter(item 1.22)	253,744	211,888

Changes in interests in mining tenements and petroleum tenements

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased	Tenement reference and location	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
	E04/2190 E04/2258 E04/2621	Application withdrawn Application withdrawn Application withdrawn	100% 100% 100%	0% 0% 0%
	E47/3104 M39/1090 M39/1091 M39/1092 E47/3105 E47/3064 E47/3065 E47/3054	Application lodged Application lodged Application lodged Application lodged Application lodged Application lodged Application lodged Application lodged	0% 0% 0% 0% 0% 0% 0% 0%	100% 40% 40% 40% 100% 100% 100% 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	8,381,982,131	8,381,982,131

• See chapter 19 for defined terms.

Appendix 5B Page 26

01/05/2013

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	487,500,000	487,500,000
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	15,000,000 83,400,000 176,200,000 7,500,000 153,200,000	15,000,000	Exercise price A$0.2 HK$0.72 HK$0.717-HK$0.967 HK$0.717-HK$0.967 HK$0.717-HK$0.967	Expiry date 30 September 2014 13 December 2015 14 January 2016 28 February 2016 20 May 2016
	7,500,000 27,000,000		HK$1.164 HK$1.240	17 January 2014 10 February2014
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 5).

• 2 This statement does / ~~does not* (delete one)~~ give a true and fair view of the matters disclosed.

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Sign here:

==> picture [120 x 78] intentionally omitted <==

Date: 30 April 2014

(Company secretary)

Print name: Chan Kam Kwan, Jason

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 and petroleum 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 or petroleum 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 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting 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.

• See chapter 19 for defined terms. Appendix 5B Page 28

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