CASSIUS MINING LIMITED — Interim / Quarterly Report 2007

Jul 24, 2007

25 JULY 2007

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ASX ANNOUNCEMENT

FOURTH QUARTER ACTIVITIES REVIEW

for the period ending 30 June 2007

HIGHLIGHTS

• Copper/lead/zinc mineralisation observed in diamond drill holes at Crystalbrook Project, located in Far North Queensland

• Extension zones of alteration and mineralisation are consistent with the gold/copper intrusive related target model

• Follow-up drilling fast tracked for August 2007

• Successful placement raising $2 million

• Shareholders approved financing at EGM

• Ongoing discussion re project acquisition strategy

SUMMARY

Intersections of significant gold, silver, lead and zinc mineralisation previously announced by Gulf Resources Ltd (ASX: GLF) for its wholly-owned Crystalbrook project in far north Queensland were followed up by a diamond drilling program during the quarter ended 30 June 2007.

The results of this drilling - combined with successful geophysical survey results previously reported – have significantly increased the exploration potential of Crystalbrook, a gold-base metal project located some 25km south west of Chillagoe and 150km west of Cairns.

Results from two diamond drill holes following up the first pass RC drilling program intersected wide zones of hydrothermal alteration with associated pyrite and pyrrhotite -chalcopyrite, arsenopyrite, galena and sphalerite observed as disseminations and in veining.

Further information About Gulf Resources Scott Reid, Chairman t 02 8247 5333 The company holds highly prospective exploration projects in the North Queensland and Tanami gold provinces. These provinces host several world class gold Wayne Kernaghan, Finance Director t 02 8247 5333 deposits with recognised exploration potential for further discoveries. Greg Duncan, Technical Director t 0427 376 426 The company also holds an advanced exploration Attribution

The company also holds an advanced exploration resource delineation project in Northern New South Wales which contains a JORC inferred resource of 309,000 tonnes at 3.12 grams per tonne gold for 31,000 ounces.

The information in this report which relates to exploration results at the Crystalbrook Project has been approved for release by Mr Greg Duncan (B.Sc., MAusIMM), who is an exploration geologist and has sufficient experience in relation to the style of mineralisation and type of deposit under consideration 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 2004 Edition). Mr Duncan has consented to inclusion of this information in the form and context in which it appears.

The company’s key aim is focused on low cost - high return exploration and corporate strategies to capture significant value for investors during this current resource cycle by offering investors a balanced exposure to Brownfield resource expansion, advanced Greenfield exploration and development potential through a gold project acquisition strategy.

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Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2007) Activities Review

Crystalbrook Project, Far North Queensland (EPM 13841 - GLF 100%)

The primary focus in the period under review was on planning and executing the initial diamond drilling program to appraise the high tenor geophysical Induced Polarisation (“IP”) anomaly at the company’s wholly owned Crystalbrook gold-base metal project in Far North Queensland. The project is located some 25km south west of Chillagoe and 150km west of Cairns.

Regional Geology & Location Map - Crystalbrook Project

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Diamond Drillling

The initial diamond drill holes intersected wide zones of hydrothermal alteration with associated pyrite and pyrrhotite-chalcopyrite, arsenopyrite, galena and sphalerite were observed as disseminations and in veining.

The holes targeted potential mineralisation identified from a recent Gulf Resources Induced Polarisation survey. The IP anomaly response was consistent with disseminated sulphide mineralisation associated with an intrusive. Hole CBD-1 extended to 380.6 metres depth and Hole CBD-2 to 452 metres.

The extensive zones of alteration and mineralisation are consistent with the gold–copper intrusive related target model. The drilling has successfully intersected the upper zone of a large mineralised intrusive related system.

The core has been half sawn and sampled on half metre intervals with over 630 samples dispatched to ALS in Townsville for gold and multi element assay.

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Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2007) Activities Review

Drilling was conducted by Tom Browne Drilling using an LF70 drill rig. Holes were collared as HQ and continued as NQ core.

Collar locations are:

	Easting	Northing	Azimuth	Dip	Depth(m)
				Depth (m)
CBD01	224910	8081861	310	-90	380.6
CBD02	224603	8082089	360	-60	452.0

Assay data is expected late in July with a drill rig booked to be on site during August for a further drilling campaign. An additional 10,000m over 20 holes is planned in the follow-up drill program.

Diamond Drill Hole & IP Anomaly Location

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RC Drilling

Results from the Reverse Circulation (“RC”) drill testing of the alteration systems within the tenement were previously reported to the ASX on 18 April 2007. The drill results confirm findings of previous explorers along the mineralized Crystalbrook Shear Zone. The shear zone can now be interpreted as a peripheral fracture tapping fluids from a modelled mineralised intrusive some 500m to the North West.

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Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2007) Activities Review

Drill results include:

• 4m of 3.8 g/t gold and 3m of 53 g/t silver, 0.1% lead, and 1.6% zinc in Hole 2

• 2m of 0.1 g/t gold, 62 g/t silver, 2 % lead and 1.1% zinc in Hole 3

• 2m of 1.5 g/t gold in hole 4

• 2m of 14.4 g’/t silver, 0.1% lead and 1.0% zinc in Hole 1

Summary of RC Drill Results - Crystalbrook Project

Hole	Easting (m)	Northing (m)	Dip/ Azimuth (°)	Total Depth(m)	From (m)	To (m)	Width (m)	Ag (g/t)	Pb%	Zn%	Au (g/t)
1	224158	8083180	-60/134	102	84	86	2	14.4	0.1	1.0	-
2	225085	8080920	-60/334	96	13	16	3	53.0	0.1	1.6	0.6
					88	92	4	-	-	-	3.8
3	225120	8081015	-60/174	198	43	44					0.33
					154	156	2	62.0	2.0	1.1	0.1
4	225074	8081033	-60/174	156	78	80	2	-	-	-	1.5
5	224618	8081213	-60/200	24	-	-	-	-	-	-	-
6	224618	8081213	-60/334	180	-	-	-	-	-	-	-
7	225789	8080898	-60/200	102	0	8	8	-	-	-	0.3
8	227620	8082439	-60/285	198	-	-	-	-	-	-	-

Notes:

• Drilling co-ordinates AMG – AGD 66 Zone 55

• Results shown are either > -.099 ppm Au or > 0.099% Pb / Zn.

• The reverse circulation samples were collected on one metre intervals and composited for assay. Assays conducted by ALS – Chemex , Townsville by the following methods

• Au-AA25, gold 25g charge fire assay.

• Mullti element ME-ICP61 – suite.

• Pb – Zn - Ag above 10,000 ppm re-assay by OG-46.

Swan Creek Project Northern Territory (EL25083 and EL24764 - GLF 100%)

Following the granting of these two highly prospective exploration tenements in the Northern Tanami region last quarter, interpretation of the reconnaissance soil sampling survey is being reviewed in preparation for a comprehensive work program in late 2007.

2 The two tenements cover a land position of some 1500km which is considered highly prospective for gold mineralisation. The Tanami Province is highly endowed with significant gold mineralisation hosted in iron rich metasediments. In the project area the iron rich formation is evident in airborne magnetic images and is associated with anomalous gold shedding into drainages.

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Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2007) Activities Review

Ewingar Northern New South Wales (EL 6490 - GLF 100%)

Following initial consultations with representatives of the Malera Bandjalan Tribe last quarter, the company is proceeding towards formalising a framework for co-operation in identifying cultural heritages sites and places within the tenement. Company management and the representatives of the tribe are planning to meet on site to review the project area in the near future.

Company Corporate

Funds from the Company’s recent successful $2m placement will be used predominantly to accelerate the ongoing drilling program on the highly promising Crystalbrook gold/base metals project.

In addition, the funds will facilitate an acceleration of the Company’s strategy of providing shareholders with an opportunity to participate in uranium exploration activities.

The Gulf Resources board, together with external consultants, has continued confidential discussions with a number of potential partners in relation to the company’s ongoing project acquisition strategy.

Details of the Issue

The successful $2 million raising involved Gulf Resources placing up to 8 million shares at $0.26 each with a free attaching 1 for 4 listed option to clients of Paradigm Capital Pty Ltd and Bligh Capital Pty Ltd. Paradigm Capital Pty Ltd acted as Lead Manager of the issue, which was completed with oversubscriptions.

The placement was completed in two tranches:

• Tranche 1: placement of 4,624,800 shares at $0.26 and 1,156,200 options to raise $1,202,448 (within the Board's capacity for the issue of 15% of Gulf’s issued securities)

• Tranche 2: placement of 3,375,200 shares at $0.26 and 843,800 options to raise $877,552 – approved by shareholders on 29 June 2007.

The board, together with external consultants, has continued confidential discussions with a number of potential partners in relation to the company’s ongoing project acquisition strategy. As well the board is finalising an opportunity for our shareholders to participate in a uranium exploration strategy.

www.gulfresources.com.au

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APPENDIX 5B

MINING EXPLORATION ENTITY QUARTERLY REPORT

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

	Name of entity
	Gulf Resources Limited
	ABN 13 115 027 033 Consolidated statement of cash flows		Quarter ended (“current quarter”)
			30 June 2007
	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 & other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows		Current quarter $A’000	Year to date (12 months) $A’000
			(554) (72) 29	(1,064) (329) 81
			(597)	(1,312)
	Cash flows related to investing activities 1.8 Payment for purchases 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 (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		(702) (202)	(702) (202)
			(904)	(904)
			(1,501)	(2,216)

Appendix 5B Mining Exploration Entity Quarterly Report

1.13 Total operating and investing cash flows (brought forward)	(1,501)	(2,216)
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 (provide details if material) – expense of issue Net financing cash flows	2,084	4,376 (211)
	2,084	4,165
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 ofquarter	583 1,773	1,949 407
	2,356	2,356

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities	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
		123
		-
1.25 Explanation necessaryforanunderstanding ofthe transactions - Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets andliabilities but didnotinvolve cash flows - 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entityhas an interest -	Explanation necessaryforanunderstanding ofthe transactions
	-
	-
	Details of outlays made by other entities to establish or increase their share in projects in which the reporting entityhas an interest
	-

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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 available $A’000	Amount used $A’000
	-		-
	-		-
Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development			$A’000
			265
			-
Total			265
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to therelateditemsinthe accountsis asfollows.	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)	464		80
	1,892		1,693
	-		-
	-		-
Total: cash at end of quarter(item 1.22)	2,356		1,773

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 (note (2))	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 (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 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	46,559,271	32,859,266	-	-
	19,266 8,000,000	19,266 8,000,000	$0.20 $0.26	- -
7.5 +Performance Rights 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	3,000,000	-	-	-
	-	-	-	-
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	23,327,402	16,577,402	$0.20	30 June 2011
	2,000,000	2,000,000	$0.20	30 June 2011
	(19,266)	(19,266)	$0.20	30 June 2011
	-	-	-
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 does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 25 July 2007 (Company Secretary)

Print name: Wayne Kernaghan

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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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