CASSIUS MINING LIMITED — Interim / Quarterly Report 2008

Jan 29, 2008

30 January 2008

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ASX ANNOUNCEMENT

SECOND QUARTER ACTIVITIES REVIEW

for the period ending 31 December 2007

KEY POINTS

• Expanded tenement coverage at its wholly owned Crystalbrook gold-base metal project in Far North Queensland, located some 25km south west of Chillagoe and 150km west of Cairns.

• Completed a capital raising of $1.1 m through a placement of 4.5 million shares at 26.5 cents per share with a free attaching 1 for 2 unlisted option.

• Identified and undertaken due diligence on a number of potential advanced projects in eastern and southern Africa.

Gulf chairman, Scott Reid, commenting on the company’s progress said “we have had a very active quarter both corporately and on the exploration front. We expect significant developments in the March quarter on our African focused activities and expect to update shareholders shortly in this regard.”

SUMMARY & REVIEW

Project Acquisition Strategy

As part of our strategy to assess and review opportunities for growth, particularly substantial resource and power generation projects, the company is in advanced negotiations with local and government partners in Eastern and Southern Africa. Commodities exposure sought includes such as Iron Ore, Coal, Chromite, Base and Precious Metals.

…continued on page 2

Further information

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

Attribution

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.

About Gulf Resources

The company holds highly prospective exploration projects in the North Queensland and Tanami gold provinces. These provinces host several world class gold deposits with recognised exploration potential for further discoveries.

As part of its strategy to seek advanced resources projects with exposure to commodities such as Iron Ore, Chromite, Base and Precious Metals the company is in advanced negotiations with local and government partners in Eastern and Southern Africa.

The company is focused on exploration, development and corporate strategies to capture significant value for its shareholders.

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Gulf Resources Ltd (ASX: GLF) Second Quarter (December 2007) Activities Review

• Tanzania

The company has entered into a Memorandum of Understanding with a local Tanzanian partner, Mr N M Banduka and the company has incorporated a local entity called UTR Development Corporation. The focus of the partnership is to seek advanced iron ore, coal, copper and gold projects in Tanzania and to liaise with Tanzania government, government agencies and para-statal companies.

The first project underway in Tanzania is the Kadolo Joint Venture (“Kadolo JV”), a partnership between our local subsidiary and Kadolo Investments Ltd. Kadolo Investments Limited (“Kadolo”) has a license for the prospecting and mining of gold (PL4164/2007) situated in Manga, Handeni and the Bagamoyo District in Tanzania and access to other highly prospective gold areas in the Iringa Region of Central Tanzania.

• Madagascar

Gulf has agreed with Mauritius based Madagascar Holdings Ltd to jointly seek opportunities in the Madagascar resources sector through local entity Austral Malagasy Mining SARL. Activities will focus on advanced mineral projects covering gold, chromite, iron ore and minerals.

• Southern Sudan

Company management were invited to meet a high level delegation from the Government of Southern Sudan in the capital Juba. Agreement was reached to review a number of advanced copper/gold resource opportunities in the country.

• South Africa

Opportunities have been reviewed in South Africa and the company is in discussion with local BEE and other partners to apply for new order prospecting rights in a number of key strategic and prospective areas. The company expects to finalise its applications next quarter.

CURRENT PROJECTS

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

The company has expanded its tenement coverage at its wholly owned Crystalbrook gold-base metal project in Far North Queensland, located some 25km south west of Chillagoe and 150km west of Cairns.

Purchase of EPM 15707 has been finalised following the issue of 272,727 shares each to Ralph De Lacey and John Sainsbury. The tenement covers the westward extension of the Silver Dollar Fault Zone in an area with an elevated (12 ppb) stream sediment gold anomaly and surface rock chip sampling to 27 g/t gold.

Further exploration utilising 3D IP and detailed soil sampling is planned to follow up on mineralised intrusive bodies emplaced along the fault zone.

The primary focus this period was on the Interpretation of the encouraging assay results have been received from the initial diamond drilling program at the Crystalbrook Project in Far North Queensland. Drilling intersected zones of anomalous copper (to 0.4 %) and zinc (to 0.3 %) mineralisation within an extensive intrusive related silica–pyrite–pyrhhotite alteration zone.

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Gulf Resources Ltd (ASX: GLF) Second Quarter (December 2007) Activities Review

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The initial two holes into a previously untested blind target confirm the presence of a large intrusive system with associated copper, zinc, lead and silver mineralisation. The result of 21m @ 248 ppm copper and 436 ppm zinc from 272m in CBDD-2 demonstrates the potential of the system to host economic mineralisation.

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Gulf Resources Ltd (ASX: GLF) Second Quarter (December 2007) Activities Review

The drill holes, drilled 380m apart, targeted a large (2 km diameter) geophysical anomaly 1400m to the north of the mineralised Silver Dollar Fault Zone. This zone was detected utilising an Induced Polarisation Survey which indicated a chargeable anomaly at depth to the north of the regional fault and resistive anomaly to the south. The anomaly is co-incident with the regional northwest Silver Dollar Fault intersection with a radial fracture system.

The extensive widths of alteration present in both holes, CBDD-1 was drilled to 380.6m and CBDD-2 to 452m and progression to a higher temperature alteration assemblage in CBDD-2 from 170m depth are considered indicative of an extensive system with zoned metal distribution. Mineralisation increased in CBDD-2 with the broadest zone of anomalous + 300 ppm zinc from 272m.

The results are considered very encouraging with confirmation of a large intrusive related mineralised system warranting continued exploration. Petrology and further assays will be undertaken on the drill core with results to be combined with previous drill results and the I.P. model to target further drilling which is scheduled to start in the March quarter, subject to weather conditions, taking into account recent heavy rainfall received in the region.

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

Exploration for gold and base metal mineralisation was undertaken on the Swan Creek Project in the Northern Territory. The project is located to the north of the gold rich Tanami Province with exploration targeting copper and gold mineralisation in coeval basement metasediments. Equivalent rock types host the majority of the Northern Territory’s gold mineralisation in the Tanami, Pine Creek and Tennant Creek districts. The company is currently awaiting assays results and will update shareholders once these have been received and reviewed.

The area has been subject to previous drill testing for Mt Isa style lead – zinc mineralisation in the Limbunya Group. Drilling intersected low grade lead and zinc. Follow up of copper intersections in drilling and gold stream sediment anomalies to 31 ppb was not conducted.

Drilling by GeoPeko intersected graphitic shales with chalcopyrite in hole LMDH8 and haematitic sericitic shale and “chert” + haematite with quartz, carbonate and haematite veining, rare pyrite and chalcopyrite in LMDH12.

These mineralised basement intersections indicate the prospectivity of this area which has seen minimal exploration.

The area has shallow soil cover which limited historic exploration. Airborne magnetics indicates folded magnetic basement rocks interpreted to be iron rich sediments which are being targeted for the gold mineralisation shedding into local streams.

The current campaign will follow up on gold stream sediment anomalies and the initial soil sampling undertaken last year. Exploration will entail stream and soil sampling, geological mapping and associated rock chip sampling. A review of the Isa style base metal mineralisation previously drilled by GeoPeko will also be undertaken.

This work will be used target drill testing early in the 2008 field season.

Note: Drillhole information reported in Exploration Licences 7140 & 7141 Combined Final Report on Exploration. Peko Wallsend Operations Ltd. Geopeko Division. By A Hurrell December 1993. Open File Report DME Library, Darwin.

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Gulf Resources Ltd (ASX: GLF) Second Quarter (December 2007) Activities Review

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

Following a number of positive consultations with representatives of the Malera Bandjalan Tribe during the quarter, the company is now proceeding towards formalising a framework for co-operation in identifying cultural heritages sites and places within the tenement.

OTHER PROJECTS & ACTIVITIES

Placement Completed

The company has raised $1,192,500 through a placement of 4.5 million shares at 26.5 cents per share with a free attaching 1 for 2 unlisted option to sophisticated investors and clients of Baker Young Stockbrokers and BBY Ltd.

The funds have been earmarked to advance the company’s expansion plans in Africa and Australia.

Investment Activities

The company will continue to look for and appraise corporate opportunities as they arise including reviewing strategies and investments in other listed companies.

As outlined last quarter, the company became a substantial shareholder in a “corporate shell” called GoldLink GrowthPlus Ltd (“GoldLink” or “GLC”), listed on the ASX, with approximately $4.5 million cash.

At the shareholders meeting on the 18 October 2007, Gulf was pleased that a significant number of shareholders decided to participate, and we note that the new board has now undertaken to implement many of the proposals put forward by Gulf.

During the period, Tidewater Investments Ltd, another substantial shareholder of GLC, made an unsolicited bid for GLC. Following advice by Tidewater to the ASX that the original script only bid has been supplemented by an alternate cash component, Gulf has decided to accept the cash bid of 14.5 cents per share.

Other Projects

Gulf examined (and continues to examine) several other corporate initiatives throughout the reporting period. Gulf is hopeful that its activities in this reporting period will lay the ground work for a major acquisition in the following quarter.

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”)
			31 December 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 (6 months) $A’000
			(631) (270) 12	(1,153) (529) 32
			(889)	(1,650)
	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)		(77) (83) (102) -	(97) (304) (130) (300)
			(262)	(831)
			(1,151)	(2,481)

Appendix 5B Mining Exploration Entity Quarterly Report

1.13 Total operating and investing cash flows (brought forward)	(1,151)	(2,481)
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	1,192 (34)	1,192 (34)
	1,158	1,158
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	7 1,009	(1,323) 2,339
	1,016	1,016

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
		180
		-
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
			300
			-
Total			300
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)	1,016		1,009
	-		-
	-		-
	-		-
Total: cash at end of quarter(item 1.22)	1,016		1,009

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	54,604,725	40,904,720	-	-
	4,500,000 3,000,000 545,454	4,500,000 3,000,000 545,454	$0.265 - $0.27	- - -
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 2,250,000	16,577,402 -	$0.20 $0.25	30 June 2011 31 December 2009
	2,250,000	-	$0.25	31 December 2009
	-	-	-	-
	-	-	-
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: 30 January 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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