CASSIUS MINING LIMITED — Interim / Quarterly Report 2008

Jul 30, 2008

Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2008) Activities Review

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ASX ANNOUNCEMENT

31 July 2008

FOURTH QUARTER ACTIVITIES REVIEW

for the period ending 30 June 2008

HIGHLIGHTS

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• Gulf Resources Limited (“Gulf”) entered into a Joint Development Agreement with one of Vietnam's largest private industrial conglomerates, the Hanoi General Export and Import Corporation, a member of the Hanoi General Export and Import Group ("Geleximco").

Joint development ownership is on a 50/50 basis and will undertake the pre-feasibility study, bankable feasibility study and implementation of a Coal to Liquid (“CTL”) fuel conversion plant in northern Vietnam

• International engineering company and highly experienced in the CTL field, Hatch Limited has been appointed to undertake the CTL Fuel Plant PreFeasibility study.

• Gulf signed a Heads of Agreement (“HoA”) with Tan Resources Ltd (“Tan”) to evaluate the potential of a Public Private Partnership/joint venture between Tan and Tanzania’s National Development Corporation for the development of Liweta and Mbamba Bay Coal Fields in south western Tanzania.

Gulf is entitled to purchase 60% interest in Liweta and Mbamba Bay Coal Fields subject to approval by Gulf following an initial technical study.

• The end of May 2008 raised $2,955,000 through a placement of 14,775,000 shares at 20 cents each to institutional and sophisticated investors and clients of Bligh Capital, BBY Ltd and Baker Young Stockbrokers. The funds will be utilised to advance its expansion plans and for working capital.

• Raised approximately $700,000 from the non renounceable option issue to shareholders which closed in June 2008. The shortfall was $146,573.38 and was underwritten by a European investor, a client of BBY Limited.

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Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2008) Activities Review

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VIETNAM

Gulf and Hanoi General Export Import JSC ("Geleximco") appointed Hatch to undertake the Coal to Liquid (“CTL”) Fuel Plant Pre-Feasibility study.

Gulf recently entered into a Joint Development agreement with one of Vietnam's largest private industrial conglomerates, the Hanoi General Export Import JSC ("Geleximco") to establish the feasibility of, and the development and implementation of an up to 60,000 barrel per day (bpd), Coal to Liquid fuel plant in northern Vietnam ("Vietnam CTL Project").

Having considered a number of proposals from independent consultant engineers and following a joint meeting in Sydney, Gulf and Geleximco are pleased to announce that they have appointed Hatch to undertake the CTL Plant Pre-Feasibility study.

Hatch is an international consulting and EPCM (Engineering, Procurement and Construction Management) company active in the principal divisions of Mining and Metallurgy, Energy (which includes Oil and Gas), and Infrastructure. The company comprises over 8,000 professional employees spread across the globe. Hatch’s hub offices are located in Canada, South Africa and Australia. Hatch currently has projects with a total value of over CAD 50 billion in execution.

TANZANIA

The signing of a Heads of Agreement with Tan Resources Ltd, to evaluate the potential of a Public Private Partnership / joint venture between the Company, Tan and Tanzania’s National Development Corporation for the development of Liweta and Mbamba Bay Coal Fields in south western Tanzania.

Gulf is entitled to purchase 60% interest in Liweta and Mbamba Bay Coal Fields subject to approval by Gulf following completion of an initial technical study, for a cash consideration of $60,000 USD and commitment to embark on a scoping study to move the resources towards development. The heads of agreement will be superseded by a more substantial Joint Venture Agreement prior to the commencement of the initial scoping study.

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Tanzania is considered by government studies to possess a considerable sized moderate to low sulphur coal deposit. This resource is currently exploited only on a small scale at Kiwira Coal Mine, but is potentially suitable as a source of energy or coal-based materials for domestic industries. There is potential for export to neighbouring Africa and Indian Ocean countries.

The Tanzanian coal fields are contained in the rocks of the Karoo Super group. Eight Karoo basins containing eleven recognised coal fields occur in the southwest part of the Tanzania. Most significant coal resources in southern Africa are found in the Karoo Super group.

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Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2008) Activities Review

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Whilst the coal fields of Tanzania have been well known for over a century, they have never been fully developed or systemically explored using modern exploration techniques.

The Liweta and Mbamba Bay coal fields are two of a number of coal fields found in Karoo aged sediments in South Western Tanzania. The coal fields are an important element in Gulf’s Mtwara development corridor strategy, which already includes the Mtwara Port redevelopment and a number of other emerging opportunities along the corridor zone.

Based upon technical information provided and published by the NDC, investigations by the Tanzanian Geological Survey and other publicly reported studies into the characteristics of the SW Tanzanian coal fields, it is estimated that the Liweta and Mbamba Bay coals fields have a combined exploration potential of between 60 and 80 million tonnes of coal within the two coal fields.

MADAGASCAR

Company management is reviewing a potential joint venture with regard to a mineral sands project in the country.

SOUTHERN SUDAN

The review of the advanced copper/gold resource opportunity in the country continued in this period.

SOUTH AFRICA

The company has continued its discussions with various BEE and other partners.

AUSTRALIAN PROJECTS

• Crystalbrook Project, Far North Queensland (EPM 13841 and EPM 15707 – GLF 100%)

Exploration activity has commenced at the Crystalbrook Project following the wet summer period. Access is being established to conduct ground geophysical surveys to extend the existing grid and provide coverage over EPM 15707. Drilling is planned to target both areas later this year.

• Swan Creek Project Northern Territory (EL24764, EL25083 and EL10097 and EL10096 - GLF 100%)

Positive exploration results have been received from the field work undertaken during October, 2007. Stream sediment and soil sampling programmes reported anomalies for gold and copper consistent with previous exploration results. Soil samples reported copper to 64 ppm in transported sediment proximal to a north west trending structure with copper mineralisation associated with quartz veining in carbonaceous shales. The soil sample grid will be extended to aid in drill targeting. Further field work is scheduled for later in the year.

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

The tenement has been renewed with exploration to commence following finalisation of the Native Title Right to Negotiate process by the New South Wales Department of Natural Resources.

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Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2008) Activities Review

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CORPORATE

Advised that it had raised $2,955,000 through a placement of 14,775,000 shares at 20 cents each to institutional and sophisticated investors and clients of Bligh Capital, BBY Ltd and Baker Young Stockbrokers. The funds will be utilised to advance its expansion plans and for working capital.

The Directors announced that the shortfall from the recent non renounceable option issue to shareholders was a shortfall of 7,328,669 options totaling $146,573.38. The shortfall was underwritten by a European investor, a client of BBY Limited.

ABOUT GULF RESOURCES

Gulf Resources is a resources development and investment company that crosses the divide between Africa and Asia. Gulf’s strategic position aims to maximise the natural development synergies that exist between Africa and Asia. Gulf operates at this new frontier of developed and developing markets in order to uplift shareholder value on a sustainable basis.

We seek Sustainable Success through:

• Partnerships for Prosperity

• Diversification of Assets

• Intellectual Expertise and Capital

With established bases in Tanzania and Vietnam, Gulf’s team of seasoned engineering, project management and resources specialists are set to develop projects of major significance to both the company and the countries in which Gulf operates.

Coupled with a strong investment bias, experienced finance division and high level partnership approach, the group is on a growth trajectory to become a major consolidated resource development and investment enterprise within five years.

Gulf’s current partners include:

• Hanoi General Export and Import Corporation, a member of the Hanoi General Export and Import Group (“Geleximco”), since its establishment in 1993 has become one of Vietnam’s largest private industrial conglomerates with substantial interests across a broad range of sectors including mining, finance, manufacturing, commodity trading, agricultural processing, energy and resources.

• The National Development Corporation of Tanzania, an organisation owned by the Government of the United Republic of Tanzania with a specific mandate to develop, coordinate and implement infrastructural and economic projects through Public Private Partnerships (PPP). Among other things, the Government of the United Republic of Tanzania has mandated NDC, on an exclusive basis, to co-ordinate and guide implementation of the various projects being undertaken in coordination with the Southern African Development Community (SADC) Regional Spatial Development Initiative. Projects identified for the NDC include power generation and transmission, transport infrastructure, telecommunications, water, agriculture, mining, tourism, forestry and fisheries and the development and regulation of Export Processing Zones and Free Ports in Tanzania.

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Gulf Resources Ltd (ASX: GLF) Fourth Quarter (June 2008) Activities Review

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• The Tanzanian Port Authority (TPA) is a statutory body incorporated to establish and coordinate Tanzania’s ports and harbours system and to provide services relating to ports and harbours facilities, including carrier, navigation, stevedore, wharfage and storage services. The TPA is also tasked with the construction and operation of ports and harbours. As an incorporated State entity, the TPA currently owns all the major ports and harbours in Tanzania, including Dar Es Salaam, Tanga, Mtwara and all lake ports in Tanzania.

Further information

Scott Reid, Chairman t 02 8247 5333 Wayne Kernaghan, Finance Director t 02 8247 5333

Attribution

The information in this report that relates to Exploration Results is based on information compiled by Andrew Johnstone who is a Fellow of the Financial Services Institute of Australasia, members of both the Australian and American Societies of Exploration Geophysicists, and member of the Australasian Institute of Geoscientists (AIG). Mr Johnstone provides exploration management services to Gulf Resources Ltd. Mr Johnstone has extensive qualifications and experience in the style of mineralisation and type of deposit under consideration and to the activity which 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 Resources and Ore Reserves”. Mr Johnstone consents to the inclusion in the report of the matters based on information provided by him and in the form and context in which it appears.

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.

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www.gulfresources.com.au
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A P P E N D I X 5 B

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

Name of entity
Gulf Resources Limited
ABN 13 115 027 033 Consolidated statement of cash flows		Quarter ended (“current quarter”)
		30 June 2008
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 OperatingCash Flows		Current quarter $A’000	Year to date (12 months) $A’000
		(1,230) (241) 29	(2,996) (974) 62
		(1,442)	(3,908)
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)		- (50) (15) - - 450	(97) (354) (148) 399 (500) 450
		385	(250)
		(1,057)	(4,158)

Appendix 5B Mining Exploration Entity Quarterly Report

1.13 Total operating and investing cash flows (brought forward)	(1,057)	(4,158)
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 financingcash flows	3,727 (241)	4,919 (275)
	3,486	4,644
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	2,429 396	486 2,339
	2,825	2,825

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
		204
		-
1.25 Explanation necessaryfor an understandingof the transactions - 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 - 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest -	Explanation necessaryfor an understandingof the transactions
	-
		n consolidated assets
	-
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	-

Appendix 5B – Page 2

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		$A’000
		400
		-
Total		400
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)	2,825	396
	-	-
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	2,825	396

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

Appendix 5B – Page 3

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	69,758,055	56,058,050	-	-
	15,153,000	15,153,000	$0.20	-
7.5 +Performance Rights 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured,converted	4,000,000	-	-	Expiring 31 May 2010
	4,000,000 -	- -	- -	Expiring 31 May 2010 -
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	22,949,042 37,129,028	16,199,042 37,129,028	$0.20 $0.25	30 June 2011 31 December 2009
	34,879,028	34,879,028	$0.25	31 December 2001
	378,000	378,000	$0.20	30 June 2011
	-	-	-
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)

Appendix 5B – Page 4

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: 31 July 2008 (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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Appendix 5B – Page 5