CANNINDAH RESOURCES LIMITED — Interim / Quarterly Report 2012

Oct 22, 2012

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LIMITED

ASX Code: PMQ

"A Vibrant Gold-Copper Exploration Company"

Quarterly activities rePort to 30 sePteMBer 2012

PLANET METALS LIMITED

ABN 35 108 146 694 71 Lytton Road (Cnr Stafford St), East Brisbane Qld 4169 GPO Box 122, Brisbane Qld 4001 T 61 7 3249 3080 F 61 7 3249 3081 www.planetmetals.com.au

Key Points / HigHligHts Summary

The September quarter was another period of advancement for Planet Metals. Field exploration programs were completed and logistics for the forthcoming Mount Borium drill program finalised. The Company looks forward to separate drill programs this quarter at each of its two key projects.

Mount Borium Gold Project

(PMQ 100%)

Located between the historic Kidston gold (>3 Million oz Au) and Einasleigh copper mines in North Queensland

• m Three separate priority target zones will be the subject of reverse circulation drilling in the December 2012 quarter. Proposed holes have been designed to test for gold mineralisation both near surface and for more extensive mineralisation at depth. All logistics associated with the drill program have been finalised or terms agreed. The drill rig is expected to be mobilised on 31 October 2012 for a minimum 1,000m (7-hole) program.

. Mount Cannindah Copper-

Gold Project

(PMQ 100% subject to farm-in agreement)

Located approx. 100km south of Gladstone, Qld

• m Planet Metals’ farm-in partner, Drummond Gold Limited (ASX Code: DGO), completed a geophysical and holistic review of the total project area during the quarter. As a result, an initial 1,000m RC drill program at the United Allies prospect, approx.

• 1.3km from the existing minesite resource at Mount Cannindah, has been proposed. Drilling is expected to be completed over the next 2 months.

• m The Mount Cannindah total resource currently stands at 5.5Mt @ 0.92% copper, 0.34g/t gold and 14.9 g/t silver within the minesite area only (refer Resource Table on Page 5). Planet remains free-carried in this project in the medium term during Drummond Gold’s earn-in stages.

BOARD AND MANAGEMENT

David K. Barwick (Non-Executive Chairman) Brett O’Donovan (Managing Director) Barry Kelly (Non-Executive Director) John Haley (Company Secretary & CFO)

Oak River Uranium/Gold Project

(PMQ 100%)

Located in North Queensland adjacent to Mount Borium

• m Planet Metals has completed three phases of fieldwork over the last 6 months. Results from gold sampling have been lower than expected however a review of the uranium potential, particularly within the Chinaman Creek prospect, is encouraging. Rock chip sampling returned some positive results with two separate samples assaying 0.17% U and 0.12% U.

Corporate

• m A capital return of 6.5 cents per share was paid to shareholders on 9 August 2012. This amounted to a $3.9 million distribution to shareholders. Cash on hand at the end of the quarter was $1.855 million, which equates to more than 3 cents per share.

• m A Notice of Annual General Meeting and the Company’s 2012 Annual Report (refer ASX releases on 21 September 2012) were provided to all Shareholders during the quarter with the AGM to be held on 30 October 2012.

• m The composition of Planet’s share register changed significantly during the quarter with a group of existing major shareholders, directors and new investors buying Metallica Minerals’ 37% stake in the Company. Planet’s two largest shareholders as at 17 October 2012 are Jien Mining Pty Ltd (11%) and Chivas Group Pty Ltd (9.7%).

• m On 31 July 2012, Brett O’Donovan was appointed to the Board as Managing Director. On the same date, Andrew Gillies resigned as a Director to focus on his other corporate commitments.

Mount BoriuM gold Project

(EPMs 18960, 19009, 19015 - PMQ 100%)

Location

The Mount Borium gold project comprises three separate granted tenements located approximately 20km southsouthwest from the town of Einasleigh in North Queensland, Australia. This tenure hosts several promising gold exploration prospects between the historic Einasleigh copper and Kidston gold mines. Past gold production at Kidston exceeded 3 million ounces, with the open pit located 8km from the Mount Borium project tenements’ southern boundary.

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Cairns 367 Km
DARWIN
7,950,000 mN
EEinnaassleeiigghhEEiinnaasslleeiigghh N
BRISBANE Kaiser Bill
PERTH Forsayth Einasleigh Road
SYDNEY
ADELAIDE CANBERRA
MELBOURNE Coolaba FlatCoolaba FlatCoolaba FlatCoolaba Flat
HOBART
Mount Bo r ium
7,940,000 mN Chloe Cu Gol d Project
Arthurs Gully Borium Extended
EPM 18960
M o unt Borium
EPM 19015 Narrawa
South
7,930,000 mN Moun t Borium
Townsville
382 Km
Oak River Projec t
EP M 1 794 5
Stephanie
7,920,000 mN EPM 19009
LEGENDPlanet Metals 100%granted tenements BrumbyCreek Stephanie
Planet Metals 100%
granted tenements
Road
River
Railway
Town
MOUNT BORIUM GOLD PROJECT
0 7,910, 2 0 00 mNProspectTenement Location 4 6 8 Lo cation of Tenementsand Prospects KIDSTON GOLD MINEKIDSTON GOLD MINEKIDSTON GOLD MINE>3M oz Au>3M oz Au>3M oz Au>3M oz Au
kilo m etres
Tenement Map including Mount Borium and Oak River
FISH HOLE CREEK
BIG STOCKMAN CREEKBIG STOCKMAN CREEKBIG STOCKMAN CREEKBIG STOCKMAN CREEK
Gregory Developmental Road
OAK RIVEROAK RIVEROAK RIVEROAK RIVER
BIG STOCKMAN CREEKBIG STOCKMAN CREEKBIG STOCKMAN CREEKBIG STOCKMAN CREEK EINASLEIGH RIVEREINASLEIGH RIVEREINASLEIGH RIVEREINASLEIGH RIVER
SODA CREEK COPPERFIELD RIVERCOPPERFIELD RIVERCOPPERFIELD RIVERCOPPERFIELD RIVER
E
m
180,000 190,000 mE 200,000 mE
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Background Geology & Interpretation

Analysis of historical data initially highlighted a strong auriferous geochemical signature. Past exploration indicated that gold is generally disseminated and associated with variable silica-pyrite-sericite (phyllic) or chloriteepidote (propylitic) alteration. Mineralisation is commonly associated with greater than 1% visible pyrite and trace amounts of spahlerite (Zn) and/or galena (Pb). Historical drill results so far indicate that gold mineralisation is widespread but low-grade. The zonation of base metals and the presence of sub-aerial lithologies (flowbanded rhyolite) indicate that Mount Borium may represent the upper-part of an Intrusion Related Gold System, and there exists potential for significant mineralisation at depth.

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PLANET METALS QUARTERLY REPORT SEPTEMBER 2012

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Mount Borium Prospect Local Geology with Notable Recent Rock Chips & Proposed 2012 Drill Program Target Zones

PLANET METALS QUARTERLY REPORT SEPTEMBER 2012

3

Forthcoming Drill Program

Target Zone A

At least 3 holes up to 180m in depth will target the significant gold mineralisation identified at the Lucky Trail workings. Mullock samples assayed up to 6.69g/t Au. Gold mineralisation at Lucky Trail is in the form of a massive quartz-pyrite breccia. No evidence suggests that this zone has ever been directly targeted by historical drilling.

Target Zone B

In 1989, Hunter Resources drilled a pair of scissored holes targeting a strong gold soil anomaly. One of these holes, MBRC-2 averaged 0.38g/t Au over its entire 102m length with a best intercept of 9m at 1.63g/t Au from 27m. Importantly both holes terminated whilst still in low grade gold mineralisation. Planet aims to test this depth potential with a 250m vertical hole as well as another hole testing lateral extensions. Recent trench mullock samples nearby assayed up to 7.87g/t Au.

Target Zone C

A shallow air-track hole drilled in the 1980’s yielded 4m @ 4.17g/t Au from 10m depth, but was never followed up. Planet is aiming to repeat this intercept and assess the mineralisation potential below this depth to approximately 80m sub-surface. Nearby workings are presumed to be the surface expression of the historical aforementioned intercept. Another hole has also been designed to test later extensions of these workings.

Drill Program Logistics

A drill contract has been entered into and landowner conduct and compensation agreements signed. Cultural Heritage clearance was received in July 2012. An earthworks program relating to access tracks and drill pads has been finalised and will be completed this month. Geological and field personnel are due to arrive onsite on 29 October with the drill rig mobilised on 31 October.

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Mt Borium drill site with peg photo
Mt Borium proposed drill site
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Historical HeliMag Data

Planet Metals has identified and obtained geophysical data from a Helimag survey flown in 2008. It is understood that the area covered by this survey includes the Mount Borium and surrounding prospects. Further details relating to the processing and interpretation of this data should become available in November 2012. Upon validation of this data, this information could provide Planet with additional high-level exploration targets.

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Lucky Trail workings

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PLANET METALS QUARTERLY REPORT SEPTEMBER 2012

Mount cannindaH coPPer-gold Project

(PMQ 100% subject to farm-in agreement with Drummond Gold)

Mount Cannindah is located near Monto, approximately 100km south of Gladstone in central Queensland. The project hosts significant porphyry-style copper-gold mineralisation within the underexplored 120km[2] tenement holding surrounding the Mount Cannindah deposit, of which 6km[2] is within granted Mining Leases.

A farm-in agreement over this project was entered into in late 2010 with Drummond Gold Limited (ASX Code: DGO). Under the terms of this agreement, Drummond are required to spend a further approximately $1.3 million from the date of this report to July 2013 to earn a 51% stake. A further $3.5 million over an additional two years would need to be spent by Drummond to achieve 75% ownership.

Drummond Gold completed a geophysical and holistic review of the total project area during the quarter. As a result, an initial 1,000m RC drill program at the United Allies prospect, approximately 1.3km from the existing minesite resource at Mount Cannindah, has been proposed. Drummond has reported to Planet that access tracks and drill pads have been completed and landowner agreements signed. Drilling is expected to be completed in November 2012.

Historical exploration at United Allies identified high grade, near surface copper and molybdenum mineralisation. Past drill programs focused on shallow drilling with only four holes drilled to depths greater than 40m in the key target area. Such intersections included 40m @ 0.6% Cu and 245ppm Mo from surface, 13.7m @ 1.4% Cu from 1.5m and 8m @ 2% Cu from 20m, all within an area approximately 350m by 250m.

A review late last year by geological modelling consultants, Hellman & Schofield, incorporating all recent drilling, produced a revised Mineral Resource Estimate – refer table below.

Mount Cannindah Resource Table (October 2011) Mount Cannindah Minesite Prospect Only

Category Measured	Tonnes (M)	Cu (%)	Au (	g/t) Ag (g/t)
	1.9	0.96	0.3	9 16.2
Indicated	2.5	0.86	0.3	4 14.5
Inferred Total	1.1	0.97	0.2	7 13.6
	5.5	0.92	0.3	4 14.9

0.5% Cu cut-off, density of 2.7t/m[3] , minor rounding errors

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DARWIN
7,271,000mN
BRISBANE
PERTH
SYDNEY
To Gladstone ADELAIDE MELBOURNECANBERRA
HOBART
MMMM OUOUOO UNTUNTNTNT C C CANNINDAHCANNINDAHANNINDAHANNINDAH
(C(C(C (C u/Auu/Auu/Au u/Au ))) )
BloBloBlBl ococcc kadekadekadekade
(A(A( ( Au) Au) u)u) CANNINDAH EASTCANNINDAH EASTCANNINDAH EASTCANNINDAH EAST LEGEND
(Cu)(Cu)(Cu) (Cu) Triassic Muncon volcanics
A u lo de target Monument Intrusive
7,270,000mN (Au)(Au) Mt Theodore Mt T (Au) (Au) Mt Theodore Mt Thheodoeodorere M MidwayMidwayMidwayidway Cu Skarn Cannidah Intrusive
(Au)(Au)(Au) (Au) Target Carboniferous Sediment
To Kalpowar
Infill Breccia
(Au)(Au) LLit (Au) (Au) LLiiti ttle Wonderttle Wondertle Wondertle Wonder (Cu/Mo)(Cu/Mo) UNITED ALLIESUNITED ALLIES (Cu/Mo) (Cu/Mo) UNITED ALLIESUNITED ALLIES CuMo CopperMolybdenum
Cu-Au-Ag Au Gold
Breccia &Au Vein target MONUMENTMONUMENTMONUMENTMONUMENT Skarn ZonesQuartz veins and quartz veinbreccia and sheets
7,269,000mN (Cu/Mo)(Cu/Mo)(Cu/Mo) (Cu/Mo) LIFESAVERLIFESAVERLIFESAVERLIFESAVER
(Cu/Mo)(Cu/Mo)(Cu/Mo) (Cu/Mo)
Mount Cannindah
Cu-Au? AppletreeAppletree (Cu/Mo)(Cu/Mo) AppletreeAppletree (Cu/Mo) (Cu/Mo) Copper Gold Joint Venture
Skarn
Target 0 400 800m
SCALE
Kalpowar Fault
325,000mE 326,000mE 327,000mE
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Mount Cannindah Mining Leases Geology Map

PLANET METALS QUARTERLY REPORT SEPTEMBER 2012

5

oaK river uraniuM/gold Project

(EPM 17945 - PMQ 100%)

As part of a consolidation of its exploration portfolio, Planet purchased this tenement from Callabonna Uranium in early 2012 for $65,000 cash. Oak River directly adjoins the Mount Borium gold project to the west, hence providing Planet with a sizeable contiguous tenement holding between the historic Kidston gold mine (>3 million ounces of gold) and Einasleigh region copper mines.

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The Oak River tenement area covers the south eastern margin of the Newcastle Range Volcanics where they sit within the Wirra Cauldron, a volcanic subsidence structure. Fieldwork over the last 4 months has focused on ground-truthing a number of historical gold and uranium anomalies. Assays from three phases of fieldwork targeting gold have returned poor results and the Company has downgraded this project for gold potential. However, a review of the uranium potential, particularly within the Chinaman Creek prospect, has yielded encouraging results. During the quarter, rock chip sampling returned some good results with two separate samples assaying 0.17% U and 0.12% U.

Historical trench with anomalous uranium values

is impossible to exactly correlate with specific hole numbers or intercepts. Nonetheless, two re-sampled intervals recorded assays of 0.012% U over 0.25m and 0.091% U over 0.78m.

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Subsequent fieldwork utilising detection devices such as a scintillometer and differential spectrometer have been conducted with mixed results. These tools highlight key zones of interest identified through historical data reviews, however, they are less effective in the identification of new target zones.

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A broader review of airborne geophysical data within the Oak River project area has commenced with a specialist expert providing a review of available data. This compilation and assessment is continuing.

Oak River Uranium bearing rock samples

Subsequently, a more advanced review of historical drilling completed by German company, Urangesellschaft, in the late 1970s was undertaken. Historical reports indicate that Urangesellschaft’s drilling yielded several promising intercepts including 0.79m @ 0.304% U3O8 from 88.84m and 2.35m @ 0.067% U3O8 from 87.56m. This drilling also outlined a mineralised palaeo-channel structure at Chinaman Creek, delineated by an argillaceous conglomerate-sandstonesiltstone lens.

Planet’s field mapping identified some abandoned drill core related to this past drilling. Planet’s geologists reviewed this core and re-sampled several zones of interest. Unfortunately, the core has not been stored satisfactorily and it

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Uranium detection using a differential spectrometer

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PLANET METALS QUARTERLY REPORT SEPTEMBER 2012

casuarina salt ProsPect

(EPM 18232 – PMQ earning-in up to 95%)

Located 50km north of Gladstone in Central Queensland, the tenement is adjacent to the large Port Alma salt fields operated by Cheetham Salt (owned by Ridley Corporation) and in an area where significant infrastructure investigations are taking place such as Port Alma and the Fitzroy and Balaclava Island coal terminals. The tenement was granted in April 2012.

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Rockhampton(10 Km)
23° 30' S CURTIS IS
EPM18232
CASUARINA SALT
23° 35' S � PT ALMA BALACLAVA � IS
�
23° 40' S
Bajool-Pt AlmaAccess Rd (Cheetham Salt Limited)Mining Leases
Gladstone(50 Km)
0 2 4 6 8 10 Km
MAJOR INFRASTRUCTURE 1:250,000
� Port Alma Bulk Loading & Storage (Gladstone Ports Corp.) Ammonium Nitrate, Explosives, Petroleum Products,Bulk Cargoes CASUARINA SALTEPM18232
� Balaclava Island Coal Export Terminal - BICET (Xstrata) Casuarina Salt Prospect
� Fitzroy Coal Terminal Project (Mitchell Group) Incorporating rail spur to Port Alma COMPILED BYREVISEDDRAFTED BY B. O'DONOVANK.J.CORRIE MAY 12MAY 12 Proj.: LATLONG (GDA 94)DWG No :SCALE 1: 500,000 FIGURE2
Bruce Highway
150° 30' E 150° 35' E 150° 40' E 150° 45' E 150° 50' E 150° 55' E 151° 00' E
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During the quarter, Planet continued with its historical review and data compilation. Information is being assessed and digitised with a summary recommendation expected to be completed by year end. This report will focus on delineating the required key project investigations. Under the terms of the farm-in agreement, Planet Metals must first meet its initial expenditure commitment of $50,000 before April 2013. A further $105,000 is required to be spent in the second year to earn 51%.

corPorate

Capital Return

As a result of sound financial management, Planet Metals maintained a very strong financial position in the first half of 2012. This prompted the Directors to offer all shareholders the opportunity to vote on a return of capital. At the Shareholder meeting on 25 July 2012, shareholders overwhelmingly approved the resolution to distribute a capital return of 6.5 cents per share. The capital return was paid on 9 August 2012. This amounted to a $3.9 million distribution to shareholders. Cash on hand at the end of the quarter was $1.855 million, which equates to more than 3 cents per share, based on the Company’s 59.7 million shares on issue.

Notice of AGM & Annual Report

A Notice of Annual General Meeting and the Company’s 2012 Annual Report (refer ASX releases on 21 September 2012) were sent to all Shareholders during the quarter with the AGM to be held on 30 October 2012. The meeting will commence at 12.00pm in the offices of Grant Thornton, Ground Level, 102 Adelaide Street, Brisbane, Queensland.

Board Changes

On 31 July 2012, Brett O’Donovan was appointed to the Board as Managing Director. On the same date, Andrew Gillies resigned as a Director to focus on his other corporate commitments.

Proposed Activities for the December 2012 Quarter

• m Complete initial drill program at the Mount Borium gold project

• m Provide support to farm-in partner, Drummond Gold as they complete a drill program at the United Allies prospect within the Mount Cannindah copper-gold project

• m Assess assays from the recent field exploration program at the Oak River Uranium-Gold Project

• m Continue studies into the merits of the Casuarina Salt prospect

• m Review additional project and corporate opportunities as they arise

For further information, please contact:

Shareholder Movements

The composition of Planet’s share register changed significantly during the quarter with a group of existing major shareholders, directors and new investors buying Metallica Minerals’ 37% stake in the Company. Planet’s two largest shareholders as at 22 October 2012 are Jien Mining Pty Ltd (11%) and Chivas Group Pty Ltd (9.7%). Chivas Group is controlled by Planet’s Chairman, David Barwick.

Brett O’Donovan Managing Director Ph: 61 7 3249 3080

PLANET METALS QUARTERLY REPORT SEPTEMBER 2012

7

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Competent Person Statement

The compilation of technical information contained in this report relating specifically to the Mount Borium and Oak River projects has been undertaken and supervised by Dr Louis Schurmann, a specialist geological consultant employed by Salva Resources. Salva has been engaged by Planet Metals to provide technical and field exploration services relating to the Mount Borium and Oak River projects. Dr Schurmann is a competent person and member of the Australian Institute of Mining and Metallurgy (AusIMM) and has relevant experience to the mineralisation, exploration results and targets and Mineral Resources being reported on to qualify as a Competent Person as defined by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Schurmann consents to the inclusion of this information in the form and context in which it appears in this report.

The data in this report that relates to Mineral Resources for the Mount Cannindah deposit is based on information evaluated by Mr Simon Tear who is a member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient

experience relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Tear is a Director of H&S Consultants Pty Ltd and he consents to the inclusion in the report of the Mineral Resource in the form and context in which they appear.

Other technical information contained in this report relating to the Mount Cannindah project has been compiled and/ or supervised by Mr Brice Mutton BSc (Applied Geology) FAusIMM (Director of Drummond Gold Limited) who is a competent person and member of the Australian Institute of Mining and Metallurgy (AusIMM). Mr Mutton has relevant experience to the mineralisation, exploration results and targets and Mineral Resources being reported on to qualify as a Competent Person as defined by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Mutton consents to the inclusion of this information in the form and context in which it appears in this report.

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PLANET 10°00'S
METALS
LIMITED
PROJECT LOCATIONS
N
Weipa
Queensland
CAIRNS
MOUNT BORIUM Einasleigh
Gold Project
Oak River Gold MineKidston TOWNSVILLE
Uranium - Gold Project
20°00'S
Mt Isa
Mackay
CASUARINA
Salt Prospect
Rockhampton
GLADSTONE
Bundaberg
MOUNT CANNINDAH
Copper - Gold Project
QUEENSLAND BRISBANE
140°00'E 0 200 400 °00'E150
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