CARNAVALE RESOURCES LIMITED — Interim / Quarterly Report 2014

Jul 30, 2014

31 July 2014

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QUARTERLY ACTIVITY REPORT For the period ended 30 June 2014

Carnavale Resources Ltd (ASX: CAV) is pleased to report on its activities at projects in USA and Western Australia for the June 2014 Quarter.

Essex Project, Utah, USA

During the quarter Carnavale withdrew from its agreement to earn an interest in the Essex Copper Tailings Project in Utah, USA.

Initial results from exploration and evaluation of the project did not meet the company’s investment criteria.

Long Horse Project – Joint Venture (Western Australia)

The Long Horse Project covers a total of 87 blocks south-west of Coolgardie, WA. It is adjacent to mineral claims and nickel sulphide occurrences known as the Queen Victoria Rocks Project owned by Hannans Reward Limited (ASX: HNR). The Long Horse project area also includes areas formerly included in a joint venture between Emu Nickel Limited and Mincor Resources NL.

With the recent granting of some of the tenements Carnavale plans to do a desktop review of historical data and to commence reconnaissance exploration of several prospects to further refine priority targets.

Gold-Silver-Copper Projects in USA

Subsequent to quarter end, Carnavale entered into an agreement giving it the option to acquire the rights to two highly prospective Gold (Au) –Silver (Ag) - Copper (Cu) projects in Arizona and Nevada, USA

Carnavale has entered into an option agreement with Tojo Minerals Pty Ltd (“Tojo”) whereby Carnavale can acquire all of the issued shares in Tojo within a 7 month period.

For details of the terms of the agreement with Tojo, refer the news release issued by the Company on 30 July 2014. The Company wishes to also release the following supporting information to ensure compliance with ASX listing rules and to meet JORC 2012 Code and guidelines for the reporting of exploration results, mineral resources and ore reserves.

The table below comprising section 1 sampling techniques and data and section 2 reporting of exploration results is to accompany the ASX release dated 30 July 2014.

1 CARNAVALE RESOURCES LIMITED ABN 49 119 450 243 Level 1, Suite 5, The Business Centre 55 Salvado Road Subiaco Western Australia 6008 T: +61 8 9380 9098 F: +61 8 9380 6761 E: admin@carnavaleresources.com W: www.carnavaleresources.com.au

Corporate

In line with the proposed acquisition of Tojo and the new growth strategy Mr Andrew Beckwith has been appointed Managing Director with Mr Ron Gajewski to remain as Chairman.

Mr Andrew Beckwith is a director of Tojo, and is a successful explorer whose past experience includes senior roles with AngloGold Ashanti, Acacia Resources, Normandy NFM, North Flinders Mines, BP Minerals Australia and more recently at Westgold Resources, where he led the team initially as exploration manager and then as Managing Director.

As at 30 June 2009 the Company had cash at bank totaling $1.52 million .

For further information contact:

Ron Gajewski Nathan Ryan Executive Chairman Investor Relations Carnavale Resources Ltd NWR Communications P: 08 9380 9098 P: +61 (0)420 582 887

The information in this report that relates to exploration results is based on, and fairly represents information and supporting documentation prepared by Mr Andrew Beckwith, a Competent Person who is a member of The Australasian Institute of Mining and Metallurgy. Mr Beckwith is a Director of Carnavale Resources Limited. Mr Beckwith has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Beckwith consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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Addendum to June 2014 Quarterly Report

Carnavale Resources Limited (ASX:CAV) provides the following addendum to the June 2014 Quarterly Activities Report lodged with the ASX on 31 July 2014 in relation to additional information required by Listing Rule 5.3.3.

Mining Tenements held at the end of the quarter and their location

None

Mining Tenements acquired during the quarter and their location

None

Mining Tenements disposed of during the quarter and their location

None

Beneficial percentage interests held in farm-in or farm-out agreements at the end of the quarter

Carnavale is in joint venture with Barrambie Minerals Limited over licences E15/1352 and E15/1372 whereby Carnavale can earn up to 80% interest in these licences by spending $1,250,000 in exploration. As at the end of the quarter, CAV had not earned an interest in the licences.

Beneficial percentage interests in farm-in or farm-out agreements acquired or disposed of during the quarter

None

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JORC Code, 2012 Edition – Table 1 report template Section 1 Sampling Techniques and Data

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

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sampling		Nature and quality of sampling (eg cut channels, random chips, or		Historical exploration sample results reported include drilling results
techniques		specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma		completed by previous parties that operated on the project. The reported drilling results are summarized in historical reports. The
		sondes, or handheld XRF instruments, etc). These examples should		company is continuing to acquire the original data, assess and
		not be taken as limiting the broad meaning of sampling.		validate the results and drill hole information. Therefore the results
		Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems		are currently considered NON JORC compliant, until the data can be validated.
		used.		The drilling comprises RC (reverse circulation) and diamond core at
		Aspects of the determination of mineralisation that are Material to the Public Report.		the prospect area on generally east west drill fences over the target north south shear zones. The previous drilling is considered to have only partially tested the overall target shear zones. The reported
		In cases where ‘industry standard’ work has been done this would be		results are considered representative of the shear zone mineralization
		relatively simple (eg ‘reverse circulation drilling was used to obtain 1		as known to date.
		m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.		The drill core has only recently been sighted and is of general good condition. Sampling was originally on half core cut basis with sample intervals on a variable length basis and appears to be of a good standard. RC drilling pulps and logging chip trays have been retained. The holes have been previously logged
				Assays have been completed at an industry acceptable commercial
				laboratory using a 30gram Au Fire Assay with AA finish and multi-
				element with a four acid digest and ICP-AEs finish. Duplicates and
				standards remains to be assessed.
Drilling		Drill type (eg core, reverse circulation, open-hole hammer, rotary air		Recent (2010/2011) third party drilling comprises 30 holes for
techniques		blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other		2,977metres of RC (reverse circulation) and 7 holes for 361 metres of diamond core completed in 2010/11 by a third party. This drilling
		type, whether core is oriented and if so, by what method, etc).		partially tests the target shear zones. Additional NON JORC
				compliant drilling from approximately 25 years earlier occurs
				elsewhere on the property and is not considered material to the
				targeted shear zones.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Drill sample		Method of recording and assessing core and chip sample recoveries		Diamond drilling core sample recoveries have been documented.
recovery		and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples.		Generally the logging shows acceptable recoveries over 90% except in limited zones where recovery is considered low. In these instances the loss relates to highly weathered material and associated drilling difficulties.
		Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential		RC drilling recoveries are unknown at this stage.
		loss/gain of fine/coarse material.		Grade verses sampling bias is not known at this stage, however it is
				noted visible gold is evident in the core, potentially indicating nuggetty
				gold issues may occur in the sampling.
Logging		Whether core and chip samples have been geologically and		Previous geological logging has been completed on all holes. No
		geotechnically logged to a level of detail to support appropriate		geotechnical logging has been sighted. The drilling indicates the
		Mineral Resource estimation, mining studies and metallurgical		entire drill holes are in highly weathered bedrock.
		studies.
		Whether logging is qualitative or quantitative in nature. Core (or
		costean, channel, etc) photography.
		The total length and percentage of the relevant intersections logged.
Sub-		If core, whether cut or sawn and whether quarter, half or all core		Diamond core has been logged and then sampled on half core cut
sampling		taken.		basis, and is considered of a good standard.
techniques		If non-core, whether riffled, tube sampled, rotary split, etc and		RC drilling is stated as drilled wet, riffle split and then sampled wet.
and sample preparation		whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the		Duplicate and standard assays for quality control measures remains to be assessed.
		sample preparation technique.		Resampling of the drill core and RC drilling pulps is currently being
		Quality control procedures adopted for all sub-sampling stages to		assessed as a measure to check previous sample results.
		maximise representivity of samples.
		Measures taken to ensure that the sampling is representative of the in
		situ material collected, including for instance results for field
		duplicate/second-half sampling.
		Whether sample sizes are appropriate to the grain size of the material
		being sampled.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Quality of		The nature, quality and appropriateness of the assaying and		Assay techniques are appropriate for the style of mineralisation
assay data and		laboratory procedures used and whether the technique is considered partial or total.		targeted. Reputable independent laboratory utilized for historical analysis
laboratory tests		For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument		Quality control measures remain to be fully assessed
		make and model, reading times, calibrations factors applied and their
		derivation, etc.
		Nature of quality control procedures adopted (eg standards, blanks,
		duplicates, external laboratory checks) and whether acceptable levels
		of accuracy (ie lack of bias) and precision have been established.
Verification		The verification of significant intersections by either independent or		No re-assaying has been completed to date by Tojo Minerals or
of sampling		alternative company personnel.		Carnavale personnel.
and		The use of twinned holes.		Review of the diamond core in the field has been completed by
assaying		Documentation of primary data, data entry procedures, data		Andrew Beckwith
		verification, data storage (physical and electronic) protocols.		Core and drilling pulps are in good condition and are well stored.
		Discuss any adjustment to assay data.
Location of		Accuracy and quality of surveys used to locate drill holes (collar and		Drill holes are located by hand held GPS to an accuracy of +/- 3m.
data points		down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.		Verification of location remain to be completed in the field.
		Specification of the grid system used.
		Quality and adequacy of topographic control.
Data		Data spacing for reporting of Exploration Results.		Currently the drilling and sampling is of insufficient density to
spacing and		Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral		determine a resource estimate.
distribution		Resource and Ore Reserve estimation procedure(s) and
		classifications applied.
		Whether sample compositing has been applied.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Orientation		Whether the orientation of sampling achieves unbiased sampling of		Drilling orientation is considered to be appropriate to test the width of
of data in		possible structures and the extent to which this is known, considering		mineralized structure, however additional drilling is required to test
relation to		the deposit type.		continuity along strike and at depth
geological		If the relationship between the drilling orientation and the orientation
structure		of key mineralised structures is considered to have introduced a
		sampling bias, this should be assessed and reported if material.
Sample		The measures taken to ensure sample security.		Unknown
security
Audits or		The results of any audits or reviews of sampling techniques and data.		No audits completed to date.
reviews				Review of the core indicates geological logging, alteration and
				mineral assemblages reflect reported assays on a visual basis

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Section 2 Reporting of Exploration Results

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

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Mineral		Type, reference name/number, location and ownership including		Results reported are only a summary of results reported by the
tenement and		agreements or material issues with third parties such as joint		previous operator. The property is under an option to earn into the
land tenure status		ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.		project. The drill results occur within registered patented and unpatented claims in Arizona, USA
		The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.		The area is managed by the Bureau of Land Management (BLM), a government body. Future drilling will require approval from the BLM
Exploration		Acknowledgment and appraisal of exploration by other parties.		Reported drill results are from work completed by a US based third
done by other				party, drilled in 2010/11.
parties
Geology		Deposit type, geological setting and style of mineralisation.		The deposit style is currently unknown, however mineralization is
				interpreted to occur associated with two vertical structures defined by
				geophysical data. The mineralization is hosted in highly weathered
				siltstones and coarser sandstones and conglomerates and associated
				with veining, shearing and breccias.
Drill hole		A summary of all information material to the understanding of the		The reported summary of results are considered to be representative
Information		exploration results including a tabulation of the following information		of the target shear zone mineralization as provide by the owner of the
		for all Material drill holes:		property.
		o easting and northing of the drill hole collar		Drilling is on east west orientated drill lines with angled drill holes
		o elevation or RL (Reduced Level – elevation above sea level in		targeting the north south trending structure.
		metres) of the drill hole collar		Validation and assessment of the location and drill hole orientation
		o dip and azimuth of the hole		data is currently underway, however is considered representative.
		o down hole length and interception depth		Additional holes occur on the property and are not considered material to the target mineralization related to the shear zones. The
		o hole length.		additional data is also deficient in many JORC aspects for reporting
		If the exclusion of this information is justified on the basis that the		purposes.
		information is not Material and this exclusion does not detract from
		the understanding of the report, the Competent Person should clearly
		explain why this is the case.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Data		In reporting Exploration Results, weighting averaging techniques,		Reported gold intercepts use uncut assay values on length weighted
aggregation methods		maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.		basis.
		Where aggregate intercepts incorporate short lengths of high grade
		results and longer lengths of low grade results, the procedure used
		for such aggregation should be stated and some typical examples of
		such aggregations should be shown in detail.
		The assumptions used for any reporting of metal equivalent values
		should be clearly stated.
Relationship		These relationships are particularly important in the reporting of		The reported drill results are down hole lengths. Orientation of
between		Exploration Results.		mineralisation is currently poorly defined and therefore true widths are
mineralisation		If the geometry of the mineralisation with respect to the drill hole		not known.
widths and		angle is known, its nature should be reported.
intercept lengths		If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true
		width not known’).
Diagrams		Appropriate maps and sections (with scales) and tabulations of		The Company is currently in the process of field validating the actual
		intercepts should be included for any significant discovery being		location of the drill holes, acquiring and assessing assays and logged
		reported These should include, but not be limited to a plan view of		geology and will provide plans and sections of the drill holes in due
		drill hole collar locations and appropriate sectional views.		course once validated.
Balanced		Where comprehensive reporting of all Exploration Results is not		The Company considers the mineralization is likely to occur as a
reporting		practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of		series of plunging higher grade shoots along the interpreted shear zones with an enclosing envelope of lower grade remobilized
		Exploration Results.		mineralization surrounding these shoots in the weathering zone. The
				summary results provided in this release reflect known mineralization
				to date and provides a representative of the style and grade of
				mineralization defined to date.
Other		Other exploration data, if meaningful and material, should be reported		Drilling was targeted on structures defined by an existing third party
substantive		including (but not limited to): geological observations; geophysical		IP geophysical survey.
exploration data		survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential
		deleterious or contaminating substances.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Further work		The nature and scale of planned further work (eg tests for lateral		Validation of the existing drilling database and field inspections are
		extensions or depth extensions or large-scale step-out drilling).		currently underway, with confirmatory resampling being considered to
		Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.		confirm assays and mineralised intervals. Proposed new drilling is currently being planned to test the along strike and down dip extents of the previously defined mineralization.

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Appendix 5B Mining exploration entity quarterly report

Appendix 5B

Mining exploration entity quarterly report

Name of entity

Name of entity	Name of entity	Name of entity	Name of entity
CARNAVALE RESOURCES LIMITED
ABN 49 119 450 243 Consolidated statement of cash flows		Quarter ended (“current quarter”)
		30 June 2014
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other – Due diligence expenses Net Operating Cash Flows		Current quarter $A’000	Year to date (12 months) $A’000
		- (17) - - (104) - 15 - - -	- (424) - - (435) - 36 - - (32)
		(106)	(854)
Cash flows related to investing activities 1.8 Payment for purchase or renewal of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other – Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - - - - - - - -	- - - - - - - - -
		-	-
		(106)	(854)

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(106)	(854)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other – share issue expenses Net financing cash flows	- - - - - -	991 - - - - (73)
	-	918
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(106) 1,636 (2)	63 1,466 (1)
	1,528	1,528

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

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		102
		-
1.25	Explanation necessaryfor an understandingof the transactions
	A$’000 Directors fees, consultancy charges and remuneration 83 Accounting ,occupancy,secretarial and legal expenses 19

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

N/A.

• 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

N/A

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

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

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	350
	-
	-
	100
Total	450

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	265 1,263 - -	379
		1,257
		-
		-
Total: cash at end of quarter(item 1.22)	1,528	1,636

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest	Interest at beginning ofquarter	Interest at end of quarter
			-	-
			-	-

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Appendix 5B Mining exploration entity quarterly report

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 (cents)	Amount paid up per security (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter	-	-	-	-
	-	-	-	-
7.3 +Ordinary securities 7.4 Changes during quarter	156,652,964	156,652,964
	-	-
7.5 +Convertible debt securities (description) 7.6 Changes during quarter	-	-	-	-
	-	-	-	-
7.7 Options and Performance Rights (description and conversion factor) Unlisted options 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Cancelled/Expired during quarter Performance Rights	131,826,452	-	Exercise price 3 cents	Expiry date 30 Nov 2016
	-	-	-	-
	7,500,000	-	-	30 June 2014
7.11 Debentures (totals only)	-	-
7.12 Unsecured notes (totals only)	-	-

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies, which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement gives a true and fair view of the matters disclosed.

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Sign here: Date: 31 July 2014 Print name: Paul Jurman Company Secretary

Notes

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities. The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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