CASSIUS MINING LIMITED — Interim / Quarterly Report 2011

Apr 27, 2011

28 APRIL 2011

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ASX ANNOUNCEMENT

THIRD QUARTER ACTIVITIES REVIEW

Gulf Industrials Limited (“Gulf” or “the Company”) (ASX Code: GLF), is pleased to provide shareholders with the Activity Review for the quarter ending 31 March 2011.

HIGHLIGHTS

• African Lion 3 Limited invests a further $0.5 million.

• Appointment of Mr Vic Fitzmaurice, Chief Executive Officer as Executive Director.

• Appointment of Mr Mike Brook, Mr Jonathan Best and Mr Robert Jurd as Non‐Executive Directors.

• Resignation of Mr Scott Reid and Mr Greg Duncan as Directors.

• Successful $884,000 raising to clients of D J Carmichael Pty Ltd.

OUTLOOK

• Shareholders approved all resolutions at the General Meeting held on 19 April 2011.

• The company raised a further $2.88 million (before expenses) from a placement of 64 million shares at 4.5 cents to clients of Veritas Securities Limited as announced on 27 April 2011.

• Gulf on track for 30,000tpa vermiculite production by September Quarter 2011.

• Further expansion options at Namekara being reviewed – expansion studies have commenced

• Resource and Exploration drilling program planned to begin at Namekara during the current quarter – including investigation of the multi mineral potential across the Bukusu Carbonatite.

Level 10 Gold Fields House 1 Alfred Street Sydney NSW 2000 ● PO Box R745 Royal Exchange NSW 1225 Australia t +61 2 8247 5333 ● f +61 2 9247 7722

ACN 115 027 033

www.gulfindustrials.com.au

‐ 2 ‐

NAMEKARA VERMICULITE MINE

Operation Update

The increase in the production trend continued in the quarter with a total of 2,247 tons produced, 447 tons above forecast. Drying of plant feed remains the bottleneck. A new drier has been purchased and will be installed in the fourth quarter. Production is forecast to be 2,200 tons during the next quarter and will ramp up once the new drier and additional plant equipment have been commissioned.

Production Summary

	September Qtr 2010	December Qtr 2010	March Qtr 2011		Year to Date
Quarterly Production (tons)	1,124	1,351	2,247		4,722
Tons per day	14	22.1	29.6		22

Production Increase to 30,000tpa

The expansion of the existing plant to 30,000 tpa is progressing satisfactorily, with the dryer delivered to site during March. All other major components have been sourced, containerised and are en‐route via Mombasa to the mine site and are expected to arrive during May. Installation and commissioning are planned to be completed during the first quarter of the 2012 financial year.

To enhance pit production commensurate with 30,000 tpa product processing, an excavator and a track dozer have been sourced and are also expected to arrive on site during May. These units, along with six 20‐ton tipper trucks purchased, will be able to produce the required material from the mine to ensure the new planned capacity is met.

Feasibility study to increase output

Future expansion studies are underway. Various output scenarios are currently under investigation.

Human Resources

The mine’s management team has been expanded during this quarter with the appointment of a Group Project Engineer, Group Human Resources Manager, Financial Manager and an Exploration Geologist.

Political, Social, Environmental, Safety and Health Matters

No major safety and health incidents were reported. Community relations are stable. Government relations are sound and this situation is expected to continue. The presidential, parliamentary and other local elections were successfully concluded although the extended elections were disruptive of production.

Level 10 Gold Fields House 1 Alfred Street Sydney NSW 2000 ● PO Box R745 Royal Exchange NSW 1225 Australia t +61 2 8247 5333 ● f +61 2 9247 7722

ACN 115 027 033

www.gulfindustrials.com.au

‐ 3 ‐

The five‐year presidential elections took place during February 2011. President Yoweri Museveni was re‐elected and the country remains politically stable.

Resource and Exploration Geology

The mining lease was extended six fold to cover an area of 1,946 hectares. The exploration licences now cover the most of the Bukusu alkaline complex.

An exploration program, including drilling, is being planned and will be implemented within the next quarter. The resource drilling programme is planned to improve the detail of the resource around the pit in order to improve the mine planning. In addition, it is also expected to improve the resource classification, extend the current resource base and to significantly improve understanding of the character of the deposit, as well as evaluate the multi – mineral potential of the carbonatite .

MADAGASCAR OPERATIONS – SOALARA LIMESTONE PROJECT

A project team visited the site in order to familiarise themselves with the project and review the various options available for the feasibility study.

CORPORATE

 African Lion 3 Limited Invests a further $0.5 Million

African Lion 3 Limited (“AFL3”), one of the Company’s key shareholders, has subscribed for an additional 25,000,000 shares at 2 cents per share to assist with the further development of the Company’s industrial mineral strategy.

Following this investment AFL3 holds 80,000,000 shares or 18.6% of the Company’s issued share capital.

 Board Restructure

During the quarter, the following board appointments were made: Mr Vic Fitzmaurice, Mr Mike Brook, Mr Jonathan Best and Mr Robert Jurd.

As part of the board changes, Mr Scott Reid stood down as director on 21 February 2011 and continues to be available as a consultant to the Company. Mr Greg Duncan also resigned as a director on 18 March 2011.

Mr Vic Fitzmaurice │ 7 January 2011

Mr Fitzmaurice has over 20 years’ experience working as a mining engineer, mine and project manager with commodities including gold, diamonds, platinum, chrome, base metals and other bulk mineral operations both underground and surface. Prior experience includes working with major mining companies such as BHP Billiton (GENCOR), De Beers and Aquarius Platinum in addition to a number of junior companies.

Level 10 Gold Fields House 1 Alfred Street Sydney NSW 2000 ● PO Box R745 Royal Exchange NSW 1225 Australia t +61 2 8247 5333 ● f +61 2 9247 7722

ACN 115 027 033

www.gulfindustrials.com.au

‐ 4 ‐

Mr Mike Brook │ 7 January 2011

Mr Brook has 30 years’ experience working within the mining industry having graduated with a Bachelor of Science in Mining Geology from the University of Wales in 1981. He joined MIM Holdings in Queensland in 1983 as a mine geologist in the copper and lead‐zinc‐silver operations before progressing to Chief Geologist for the copper mining operations. In 1993 Mr Brook joined stockbrokers J B Were & Son as a resource analyst specialising in emerging resource companies. In 2001 Mr Brook joined Lion Manager and has been focused on African mining investment and has been responsible for investments made by the special purpose African Lion investments funds (African Lion, African Lion 2 and African Lion 3). Mr Brook became an Executive Director of Lion Manager in 2004. The African Lion 3 Fund is a major shareholder in Gulf and currently owns 18.6% of the issued share capital.

Mr Jonathan Best │ 21 February 2011

Mr Best has extensive experience in senior management, leadership and business strategy in the mining industry, including the Anglo American and De Beers groups. Among other senior management positions, he served as the Executive Director and Chief Financial Officer for AngloGold Ashanti from 1998 to 2005. He currently has a number of Independent Non‐ Executive Directorships, including AngloGold Ashanti Holdings Plc and JSC Polymetal.

Mr Best will chair Gulf’s audit committee.

Mr Robert Jurd │ 21 February 2011

Mr Jurd is experienced in all facets of the mining industry from operations to corporate finance. He served as an executive for Trans Natal Coal Corporation, Goldfields, GENCOR (which merged into BHP Billiton), as well as Head of Resources – Investment Banking Division at ABSA Corporate and Merchant Bank for nine years. In his new role at Gulf, Mr Jurd will serve on the audit committee.

 $884,000 Capital Raising

During the quarter, the company successfully placed 26,000,000 shares at $0.034 per share to clients of D J Carmichael Pty Ltd raising a total of $884,000 (before expenses).

SUBSEQUENT TO QUARTER END

Shareholders approved all resolutions at the General Meeting held on 19 April 2011.

The company raised a further $2.88 million (before expenses) from a placement of 64 million shares at 4.5 cents to clients of Veritas Securities Limited as announced on 27 April 2011.

*ENDS***

FURTHER INFORMATION

Vic Fitzmaurice, CEO Victoria Thomas, Six Degrees Investor Communication

t | +27 72 778 8889 t |+61 3 9674 0347

Level 10 Gold Fields House 1 Alfred Street Sydney NSW 2000 ● PO Box R745 Royal Exchange NSW 1225 Australia t +61 2 8247 5333 ● f +61 2 9247 7722

ACN 115 027 033

www.gulfindustrials.com.au

‐ 5 ‐

COMPETENT PERSONS STATEMENT

The information in this report that relates to Mineral Resources is based on information compiled by HennieTheart, BSc (Hons), MSc, PhD, Pr. Sci. Nat (SACNASP 400069/88), FSEG, FGSSA, FAAG; Shaun Crisp, BSc (Hons), Pr.Sci.Nat. (SACNASP 400076/09); and Brent Barber, BSc (Hons), MPhil, AusIMM (222559), AAPG (59319‐8).

HennieTheart and Shaun Crisp are registered with the South African Council for Natural Scientific Professions (SACNASP), a JORC Recognised Overseas Professional Organisation "ROPO" and Brent Barber is a member of the Australasian Institute of Mining and Metallurgy (AusIMM). They are full‐time employees of SRK Consulting and have experience which is relevant to the style of mineralisation, type of deposits under consideration and to the activity which they have undertaken, to qualify them as a Competent Persons, as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves'.

HennieTheart, Shaun Crisp and Brent Barber consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

The information in this release that relates to the Exploration Process is based on information compiled by A Johnstone who is a member of the Australian Institute of Geoscientists (AIG). Andrew Johnstone provides exploration management consulting services to Gulf Industrials Ltd and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which Andrew Johnstone has undertaken 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'.

Andrew Johnstone consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Level 10 Gold Fields House 1 Alfred Street Sydney NSW 2000 ● PO Box R745 Royal Exchange NSW 1225 Australia t +61 2 8247 5333 ● f +61 2 9247 7722

ACN 115 027 033

www.gulfindustrials.com.au

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

APPENDIX 5B

MINING EXPLORATION ENTITY QUARTERLY REPORT

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

Name of entity
Gulf Industrials Limited
ABN 13 115 027 033	Quarter ended (“current quarter”)
13 115 027 033	31 March 2011

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & 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 (provide details if material) Net Operating Cash Flows	Current quarter $A’000	Year to date (9 months) $A’000
	435 (329) (398) (1,031) (137) 9	907 (856) (1,161) (2,376) (464) 39
	(1,451)	(3,911)
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 Advances from other entities 1.11 Loans repaid by other entities 1.12 Distribution Fee Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	(100) - (593) - 4 - 33 -	(817) - (1,024) - 4 58 296 53 1,140
	(656)	(290)
	(2,107)	(4,201)

• See chapter 19 for defined terms.

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Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(2,107)	(4,201)
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) Net financing cash flows	1,340	4,466
	1,340	4,466
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	(767) 1,271	265 239
	504	504

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
		316
		-
1.25 Explanation necessary for an understanding of the transactions Since the end of the quarter the company has raised $2.88 million before expenses from a placement announced on 27 April 2011. 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 reporting entityhas an interest	Explanation necessary for an understanding of the transactions
	Since the end of the quarter the company has raised $2.88 million before expenses f announced on 27 April 2011.	rom a placement
	Details of outlays made by other entities to establish or increase their share in projects in which the reporting entityhas an interest

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
	-	-
	-	-

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration		$A’000
		250
		150
		450
		125
Total		975
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 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)	504	1,271
Total: cash at end of quarter(item 1.22)	504	1,271

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 of quarter	Interest at end of quarter

• See chapter 19 for defined terms.

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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	429,604,729	429,604,729
	25,000,000 26,000,000	25,000,000 26,000,000	$0.020 $0.034	- -
7.5 ~~+~~Convertible debt securities(description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	25,449,072 52,629,028 12,000,000 32,315,000 6,000,000 6,000,000 2,750,000	25,449,072 52,629,028 - - - - -	Exercise price $0.20 $0.10 $0.05 $0.05 $0.03 $0.079 $0.094	Expiry date 30 June 2011 31 March 2013 31 May 2012 20 July 2015 11 November 2012 10 March 2016 10 March 2016
	6,000,000 2,750,000	- -	$0.079 $0.094	10 March 2016 10 March 2016
	-	-	-	-
	-	-	-	-
7.11 Debentures (totals only)
7.12 Unsecured notes (totals only)

• See chapter 19 for defined terms.

Appendix 5B Page 4

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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 /does not* (delete one) give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 28 April 2011 (Director/Company secretary)

Print name: Wayne Kernaghan

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.

== == == == ==

• See chapter 19 for defined terms.

30/9/2001

Appendix 5B Page 5