CORE LITHIUM LTD — Interim / Quarterly Report 2012

Oct 25, 2012

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26th October 2012

Centralised Company Announcements Platform Australian Stock Exchange 10[th] floor, 20 Bond Street Sydney NSW 2000

QUARTERLY ACTIVITIES AND CASHFLOW REPORT 30 SEPTEMBER 2012

Please find attached the Quarterly Activities and Appendix 5B Quarterly Cash Flow Reports for the quarter ended 30 September 2012.

Yours faithfully

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Stephen Biggins Managing Director

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A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au

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ASX Release

26 October 2012

QUARTERLY ACTIVITIES REPORT FOR THREE MONTHS ENDED 30 SEPTEMBER 2012

CORE EXPLORATION LTD

Level 2 143 Hutt Street Adelaide SA 5000

CONTACT:

Stephen Biggins Managing Director

Highlights

• High grade copper and uranium sampled at Choppy (new 6.6% copper) and Scott Lee (10.5% copper) prospects, Fitton, S.A.

• Airborne magnetics survey identifies five additional drill targets Fitton, S.A.

• RC drilling now underway at Fitton, S.A.

Jarek Kopias

Company Secretary jkopias@coreexploration.com.au

• 203 g/t silver and 13.4% lead/zinc on new 1,000km[2] EL 5015 Yerelina, S.A.

E-MAIL:

info@coreexploration.com.au

WEBSITE:

www.coreexploration.com.au

Directors:

Greg English Non-Executive Chairman

Stephen Biggins Managing Director

Michael Schwarz

Executive Director Exploration

Issued Capital:

41,500,000 Ordinary Shares 8,750,000 Unlisted Options

• Core builds strong position in new IOCG province in the N.T – new Albarta Project comprises 16 tenements

Overview

The Board of Core Exploration Ltd (“Core”) is pleased to present its quarterly activities report for the period ended 30 September 2012 . Core had a very active quarter both on the exploration front and corporately.

Exploration activity during the quarter includes outstanding copper/gold/silver/ uranium results at Fitton and silver/lead/zinc assays from the new Yerelina EL in S.A.

In addition, Core completed a process taking many months building its Albarta Project and taking a strong position in what the company believes will be Australia’s new copper exploration hot-spot in the N.T.

ASX Code: CXO

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au

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Project Activity

FITTON PROJECT, South Australia EL 4569 (100% CXO)

New, previously unreleased assays of rock-chip surface sampling from Choppy Prospect within the Fitton Project (Figure 1 & 2) include:

• Sample MP 00595: 6.6% Copper 0.85 g/t Gold 28 g/t Silver

• Sample MP 00681: 4.2% Copper 0.64 g/t Gold 32 g/t Silver

During the reporting period, Core completed a number of surface sampling and mapping campaigns to ground truth the source of magnetic anomalies identified by the Company’s geophysical surveys on EL 4569 Fitton.

Core currently has a 2,000m reverse circulation (RC) drilling program underway on these targets at the Company’s 100% owned Fitton Project (EL 4569) in northern South Australia.

Core’s RC drilling at Fitton is targeting the following prospects (Figure 1):

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Figure 1. Prospect and drill target locations overlain on magnetic image, Fitton Project, S.A.

Scott Lee Prospect

Previous surface sampling by Core at Scott Lee has assayed up to 10.5% copper and 0.34% uranium (U3O8). A number of samples contained highly anomalous uranium above 100ppm for a strike length of over 800m and graded above 1% copper over a strike length of 150m.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au

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Mineralisation at Scott Lee is associated with a shear zone and is magnetic at a local scale.

Choppy Prospect

New copper assays of up to 6.6% at surface, with high levels of gold 1g/t and silver 32g/t also associated with copper mineralisation at Choppy (Figure 2 & ASX announcement 28/8/12).

The Choppy Prospect is located 400m southwest of the Scott Lee Prospect. Copper mineralisation at Choppy consists of malachite bearing quartz and hematite along zones of sheared granite that are magnetic at local scale (Figure 1).

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Figure 2. Choppy Prospect showing location of follow up sampling

Livingstone and Siri Prospects

At the Livingstone and Siri prospects, two new magnetic targets of similar dimensions to Scott Lee and Choppy have been identified to the east (Figure 1). Further mapping of these areas is currently underway to identify additional surface expressions of mineralisation.

Sherlock Prospect

Sherlock Prospect focus is on a 700m long magnetic anomaly that is covered by shallow soils (Figure 1 & 3). The magnetic anomaly is located on a regional scale WNW/ESE shear zone that intersects with the Hamilton Prospect 2km west (Figure 1). Historical copper workings are located further east along this same structure.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au

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Hamilton Prospect

The largest target identified to date is a much larger magnetic anomaly located 2km south-west of Scott Lee at the Hamilton Prospect. While it is yet to be established if this new 1,300m long and 200m wide anomaly is mineralised, the outcropping geology comprises magnetite veined and sheared granite similar to Scott Lee and Choppy (Figure 1).

The large magnetic anomaly at Hamilton is positioned parallel to and within the regional-scale Terrapinna Corridor at a key geological position in between the Mt Painter and Mt Babbage Inliers (Figure 1 & 4).

Gold Prospect

Follow up sampling was also undertaken at a new gold target in the Adelaidean sediments 2km to the south west of the Scott Lee Prospect at the Gold Prospect.

Quartz veining, similar to that containing the initial 1 g/t gold sample, was mapped along a 1.3km strike to the south. Ground magnetics also shows an anomalous magnetic response associated with the veining and several possible repetitions.

A number of samples along the quartz vein return anomalous gold values up to 0.14 g/t. A repeat of the initial 1 g/t sample returned 0.11g/t which is consistent with the expected nuggety nature of gold in quartz veins. Elevated copper was also identified associated with this gold target (Figure 3). The generally anomalous nature of the vein system warrants further follow up.

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Figure 3. Ground magnetics in the vicinity of the New Gold Prospect with new anomalous copper samples

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OTHER SURVEYS ON FITTON

Initial ground magnetic survey

A ground magnetic survey was completed over the Scott Lee Prospect and broader area in early June 2012. The survey was undertaken after the observation that quartz-magnetite rocks were associated with copper.

The survey highlighted a very good correlation between observed copper mineralisation and shearing at surface (at the Scott Lee Prospect) and roughly east-west trending magnetic anomalies in the gridded data. Importantly a further two linear anomalies were observed to the south of the Scott Lee Prospect (Figure 1).

Detailed Airborne Magnetic and Radiometric Survey

Following the positive results of finding new outcropping copper mineralisation associated with ground magnetic anomalies, a 1,000 line kilometre airborne magnetic and radiometric survey was flown to cover the entire prospective basement area of the Fitton tenement.

The detailed 25m line spaced survey defined a much more coherent anomaly with the copperuranium mineralisation sitting on the southern margin of the anomaly at Scott Lee (Figure 1). The main anomaly has a strike length of 430m with a second smaller anomaly approximately 140m to the west. Both are associated with anomalous copper-uranium and gold.

New targets were identified at the Choppy, Livingston and Siri Prospects just to the south of Scott Lee. Each target consists of a roughly east-west magnetic anomaly similar to Scott-Lee. Outcropping copper-gold-magnetite mineralisation has been identified at Choppy indicating that all these magnetic targets are prospective for copper-gold-uranium.

The broader survey has identified a much larger magnetic anomaly associated with the NE-SW Tindelpinna Shear Zone 2km south-west of the Scott Lee Prospect. Now identified as the Hamilton Prospect. This anomaly occurs in a NE-SW direction and is 1.4km long and 250m wide. It is yet to be established if this anomaly is associated with the same mineralizing system but magnetite bearing quartz veins have been identified in outcrop at this locality (Figure 1).

Heritage Clearance Surveys

Heritage site clearance surveys ahead of drilling were completed during the period with representatives and an anthropologist from the Adnyamathanha Traditional Land Association. All proposed drill sites and tracks were cleared.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au

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Yerelina EL 5015

Core Exploration’s newly granted 1000km[2] Yerelina EL 5015 is highly prospective for shallow base and precious metal mineralisation. EL 5015 is located 20km west of Core’s Fitton Project (Figure 4).

Core’s mapping and sampling around and along strike from historic workings during the period has confirmed extensive silver, lead and zinc mineralisation. Mineralisation occurs at all three location sampled so far, which has exciting implications for the size of the broader mineralizing system.

	Historic Target		Silver		Lead		Zinc		Pb+Zn
	Great Gladstone		203g/t		5.0%		2.3%		7.30%
	Emily		12.1 g/t		0.9%		12.4%		13.34%
	Big Hill		5.9 g/t		1.7%		0.6%		2.35%

Table 1. Summary of best results of reconnaissance sampling of 3 historic mine workings, EL 5015.

Four historical workings, operating in the late 19[th] and early 20[th] century, are recorded from within EL 5015. Core’s analysis of modern satellite imagery and the Company’s recently completed detailed heliborne magnetic and radiometric survey data has identified that these workings are hosted by a large scale system of repeated north/south regional structures over many kilometres (Figures 5 & 6).

Core is also encouraged by the recent base metal discovery made by Cauldron Energy (ASX:CXU - 17/10/2012) 20km to the north of Core’s base metal and silver results (Figure 4).

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----- Start of picture text -----

CXU
Base Metal Discovery
Core
RC Drilling
Core
Base Metal
Mineralisation
EL 5015
----- End of picture text -----

Figure 4: Area of focus of current RC drilling program on Core’s EL 4569 Fitton and also new EL 5015 Yerelina and surrounding mineral occurrences and mines, northern South Australia.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au

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Figure 5. Outcrop samples with significant silver, lead and zinc assays and historic working locations overlain on magnetic image, EL 5015.

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Figure 6. Outcrop samples with significant silver, lead and zinc assays and historic working locations overlain on satellite image, EL 5015.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au

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Corporate

Core builds strong position in new Northern Territory IOCG province

During the reporting period, Core has engineered - through joint venture, acquisition and new tenement applications - the rights to 16 mostly contiguous tenements that comprise the Company’s new Albarta Project within this newly-identified and previously unexplored IOCG (Iron-Oxide-Copper-Gold) terrain.

Core has built a strong strategic holding of tenement interests covering around 1,600km[2] of highly prospective geology within Australia’s new East Arunta IOCG province in the Northern Territory, 100km NE of Alice Springs (Figure 7).

Core’s tenements cover a number of significant copper, gold +/- uranium and rare earth element (REE) mineral occurrences (Table 1, Figure 7). The Company believes that the existing evidence of mineralisation, recently confirmed IOCG alteration in the region and large tenement holding over a substantial strike length of regional structures, makes this exciting exploration project very attractive for investment.

Importantly, Core’s new Albarta Project covers some 100km of strike length of interpreted prospective regional structures which are thought to control mineralisation.

The Company’s recognition and early move on Albarta leads growing industry and market recognition of this new, outcropping East Arunta IOCG terrain.

Prospect	Copper	Gold	Uranium	Other
Oona	2.7% Cu			2.6% Zn
Paradise Well	3.8% Cu
Blueys	2% Cu			320g/t Ag
East Amarata		25g/t Au
Pattersons		30m@0.5g/t Au*
Daicos			19.4% U	22.3% REE
Yambla			13.8% U
Blueys Folley				7% REE
Mordor				2m@1.1g/t Pt+Pd+Au*

Table 1. Significant surface rock chip sampling and drill intercepts (*) from prospects on Core’s Albarta Project. These historic results are sourced from NTGS databases and Company exploration reports.

The recently confirmed East Arunta IOCG terrain represents a newly-recognised Proterozoic copper – gold province characterised by a long belt of structurally deformed granite and sedimentary sequences that contain variable amounts of quartz veining, strong iron and fluorite alteration, and outcropping copper - gold mineralisation.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au

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Figure 7. Core Exploration’s and surrounding tenements and prospect locations, East Arunta IOCG Zone, Northern Territory.

The region’s prospectivity has been confirmed by the discovery of copper-gold mineralisation associated with IOCG style alteration by the Northern Territory Geological Survey (NTGS) and the recent exploration success by Mithril Resources Ltd (ASX:MTH) with the discovery of further copper–gold mineralisation on its nearby Huckitta project (Figure 7).

Recent drilling by other explorers at a number of prospects within the East Arunta province has encountered IOCG style alteration and copper mineralisation. Copper sulphide mineralisation and broad widths of strong alteration confirm that a significant iron oxide copper-gold mineralised system is present in the region.

In addition to its IOCG potential Core’s Albarta tenements are also prospective for other mineralisation styles including gold, uranium, rare earths, volcanic hosted massive sulphide and sedex style base metal mineralisation.

Although the range of exciting prospects identified by Core on the Albarta Project are of a high priority (Figure 7), by acquiring a large tenement holding Core is able to undertake a regional and tenement wide, systematic approach to exploration focusing on IOCG targets.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au

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CASH POSITION

Core Exploration had $1.93 million cash in hand as at 30 September 2012.

Outlook – December 2012 Quarter

Fitton, SA

First assay results from the new RC drilling program are to be received by the end of November.

Yerelina, S.A

Further mapping and sampling is planned at this tenement in Q4 2012 and will include mapping and sampling at the fourth historical workings (Great Northern) and at other potential extensions of gossan identified from interpretations of satellite imagery and newly acquired airborne magnetic data.

Core will undertake petrophysical analysis of the mineralised samples in an attempt to develop geophysical methods that could map mineralisation at depth. This data, in conjunction with surface mapping and sampling, will allow the company to develop a targeted drilling program focusing on near surface high grade mineralisation in 2013.

Albarta, N.T

Exploration on the Albarta project comprising reconnaissance geological mapping and sampling will commence in Q4 2012 focussed toward prioritising targets for drilling in 2013.

The information in this report that relates to exploration results, mineral resources or ore reserves is based on information compiled by Mr Stephen Biggins who is a member of the Australasian Institute of Mining and Metallurgy. Mr Biggins is the Managing Director of Core Exploration Ltd. Mr Biggins has sufficient experience which is relevant to 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 Biggins consents to the inclusion in this ASX Release of the matters based on his information in the form and context in which it appears.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au

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ASX Announcements

The Company made the following announcements during the quarter since the previous quarterly report and to the date of this report:

Date	Announcement
17 Jul 2012	Quarterly Activities Report and Appendix 5B
23 Jul 2012	Core Exploration featured on Boardroom Radio Interview
10 Aug 2012	Exciting new targets identified at Fitton Project SA
17 Aug 2012	Copper found in outcrop of new magnetic targets at Fitton
20 Aug 2012	Core Exploration featured on Boardroom Radio interview
28 Aug 2012	4% copper found in outcrop at new Choppy Prospect
13 Sep 2012	Core Exploration 2012 Annual Report
24 Sep 2012	Trading Halt
25 Sep 2012	Core builds position in new IOCG province
25 Sep 2012	Core Exploration featured on Boardroom Radio Interview
3 Oct 2012	Appendix 3B - unlisted option issue
4 Oct 2012	Core extends exploration by 1,000km2 around Fitton Project
5 Oct 2012	Core Exploration featured on Boardroom Radio Interview
10 Oct 2012	Copper Exploration in IOCG Provinces Presentation
12 Oct 2012	Notice of AGM and Proxy
25 Oct 2012	First drill program commences on Fitton Project, S.A.

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au

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

Core Exploration Ltd
ABN 80 146 287 809	Quarter ended (“current quarter”)
80 146 287 809	30 September 2012

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 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 (provide details if material) - PACE GRANT Net Operating Cash Flows	Current Quarter (3 Months) $A’000	Year to date (3 Months) $A’000
	- (201) - - (166) - 30 - - - 50	- (201) - - (166) - 30 - - - 50
	(287)	(287)
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)	- - (2) - - - - - - -	- - (2) - - - - - - -
	(2)	(2)
	(289)	(289)

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1.13 Total operating and investing cash flows (broughtforward)	(289)	(289)
Cash flows related to financing activities 1.14 Proceeds from issues of shares 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) - Capital raising costs Net financing cash flows	- - - - - -	- - - - - -
	-	-
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	(289) 2,221 -	(289) 2,221 -
	1,932	1,932

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
		126
		-
1.25	Explanation necessary for an understanding of the transactions
	The amount above includes all payments to Directors and also includes payments to entities associated with Greg English and Stephen Biggins. The payments relate to executive services and directors fees on commercial terms.

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	n/a
	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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Financing facilities available

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

Estimated cash outflows for next quarter

4.1 4.2 4.3 4.4	Exploration and evaluation Development Production Administration	$A’000
		400
		-
		-
		145
	Total	545

4.1 4.2 4.3 4.4	Exploration and evaluation Development Production Administration

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 Other (provide details)	592	561
	1,340	1,660
	-	-
	-	-
Total: Cash at end of quarter(item 1.22)	1,932	2,221

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed	Tenement reference	Nature of interest (note (2)	Interest at beginning of quarter	Interest at end of quarter
	EL28349 – Amadeus EL 4568 - Honeymoon Sth Olary	Relinquished Reduced	100% 100%	0% 100%

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6.2 Interests in mining tenements acquired or increased	EL5015 - Yerelina EL 28853 EL 28854 EL 28852 EL 27369 EL 27709 EL 28029 EL 28136 EL 28546	Granted Exploration Licence JV earn in 51% JV earn in 51% JV earn in 51% JV earn in 51% JV earn in 51% JV earn in 51% JV earn in 51% JV earn in 51%	0% 0% 0% 0% 0% 0% 0% 0% 0%	100% 0% 0% 0% 0% 0% 0% 0% 0%

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 upper security (cents)
7.1 Preference+securities (description) 7.2 Changes during quarter
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	41,500,000	29,900,000		Fully paid
7.5 +Convertible debt securities (description) 7.6 Changes during quarter
7.7 Options (description and conversion factor) Unlisted Options Unlisted Class B Options Unlisted Employee Options Unlisted Employee Options Unlisted Employee Options 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	7,000,000 1,500,000 75,000 100,000 75,000	- - - - -	Exercise price 25 cents 25 cents 20 cents 11 cents 13 cents	Expiry date 30 Jun 2014 31 Oct 2014 19 Sep 2013 18 Jun 2014 30 Sep 2014
7.11Debentures(totals only)
7.12Unsecured notes(totals only)

A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au

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.

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Jaroslaw (Jarek) Kopias

Date: 26 October 2012

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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A Level 2, 143 Hutt Street, Adelaide SA 5000 | T (08) 7324 2987| F (08) 8312 2002| E info@coreexploration.com.au www.coreexploration.com.au