DGR GLOBAL LIMITED — Interim / Quarterly Report 2012

Apr 29, 2012

A C T I V I T I E S R E P O R T F O R T H E M A R C H 2 0 1 2 Q U A R T E R

QUARTERLY REPORT

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Quarter Highlights

DGR Global Ltd | ASX : DGR

• Oversubscribed AUD75.0 M IPO and ASX listing of Armour Energy Limited on 26 April 2012

• Largest oil and gas IPO in Australia for ten years

• London based new opportunities group targeting bulk commodities in Africa and the Middle East

• Armour Energy Ltd | (ASX: AJQ – DGR 25%)

• Preparation and mobilisation for seismic testing and drill pad establishment on NT tenementsD’Aguilar Gold holds

• Preparation for drilling of Morey’s 1 Well on Lakes Oil 35.2 million shares NL PEP 169 in Otway Basin, Victoria. Armour spending representing 15.6% AUD2.5M to earn 51%. Well spudded 19 April and of Solomon Gold plc. target zone expected to be reached 30 April

• Successful IPO and ASX listing after quarter end

• Mt Isa Metals Ltd (ASX: MET – DGR 30.6%)

• Outstanding near surface drill assay results continue from the Nabanga Gold prospect, particularly in the North and Central Zones

• New gold discovery in the Natougou area on the eastern margin of the Boungou Gold Prospect

Solomon Gold plc (LSE: SOLG – DGR 10.5% )

• Further drilling at Rannes continues to extend the resource and mineral system

• Successful placement of 28.8 million shares raises A$3.4 million

• Letter of Intent signed to acquire 85% of the Cascabel gold-copper-silver porphyry property in northern Ecuador

• Dr. Bruce Rohrlach appointed as Chief Geologist

• Navaho Gold Ltd (ASX: NVG – DGR 29%)

• Alliance formed to explore for Carlin-style gold deposits over substantial ground position in New Mexico, USA. Significant potential for first mover advantage in a new gold province

• Completion of deep (1,154 m) diamond drill hole on Utah Clipper project area with anomalous assay results

• AusNiCo Ltd (ASX: ANW – DGR 41.5%)

• Detailed review of last quarter drilling program identified additional targets

• Review of recently granted Heazlewood River tenement in NW Tasmania show that several prospective targets remain untested

IronRidge Resources | DGR 58% owned

• Raised AUD1.0M in working capital to fund on-going exploration and development

• Applications for two exploration areas prospective for hematite and magnetite significantly progressed in Gabon, West Africa

Archer Resources Ltd | 67% DGR owned

• Further research upgrades the coal exploration potential of exploration licence areas in the Arckaringa Basin of South Australia (held by wholly owned subsidiary AimFire Energy Pty Ltd)

Pinnacle Gold Pty Ltd | 94% DGR owned

• Eight (8) Exploration Licences granted in NSW over potential new gold and silver province

• Fifty (50) kilometres of known historic gold workings with no recorded previous drilling

• Landowner access agreements finalised on first areas and exploration commencing

Figure 5

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DGR Global Creates Resource Companies

During the quarter DGR Global strongly advanced its objective to become a diversified global resource project generator and investment company.

DGR Global generates its own large scale resource exploration projects directly through the skills and experience of its accomplished team of explorationists. Most resource investment companies purchase their investment stakes at a high cost with restricted scope and low diversity and it is this important difference that gives DGR Global its strong competitive edge.

Many exploration companies tend to prematurely focus on the definition of a restricted resource and/or development without the scope for world class discoveries. In contrast, DGR Global’s philosophy is to secure provincial tenure positions, prospective for commodities with a high demand D’Aguilar Gold holds growth profile, which attract globally diverse capital funds. 35.2 million shares The company adopts a lateral and creative approach in the identification of both the commodity and exploration representing 15.6% target. of Solomon Gold plc.

DGR Global exploration projects tend to be very large, targeting new provinces with the potential to make worldclass discoveries. The exploration concepts are often novel. While increased metal prices and advances in technology

can turn former sub economic deposits into viable projects, DGR Global Projects frequently emerge from detailed reassessment and reinterpretation of large databases with a new perspective. In the past, DGR Global Directors and Managers have applied new exploration models to extensive tenement areas which have contributed to the identification of new mineral provinces and the discovery of nationally significant resources.

DGR Global’s strategy to independently finance, manage and list its key assets on recognised stock exchanges is designed to deliver negotiability for its key assets, provide less dilutive funding of forward exploration programs and deliver expanded and focussed Project Management Teams independent of DGR Global .

DGR Global holds key equity positions in its subsidiary companies after listing. As shown in the DGR Global Group Corporate Structure (see Fig 1), at 30 April DGR Global holds 25% ASX listed Armour Energy Ltd (ASX : AJQ) 10.5% AIM listed Solomon Gold Plc (LSE: SOLG), 30.6% ASX listed Mt Isa Metals Ltd (ASX: MET), 41.5% AusNiCo Ltd (ASX: ANW) and 29% Navaho Gold Ltd (ASX: NVG). Table 1 and the following figures 2 and 3 demonstrate how DGR Global continues to build value for shareholders.

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Fig 1: DGR Global
Corporate
Structure as at
26 April 2012
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Figure 5

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DGR Global Creates Resource Companies

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D’Aguilar Gold holds 35.2 million shares representing 15.6% of Solomon Gold plc.

Table 1: Current portfolio of Assets held by DGR and market valuation of listed entities

*Market value represents the market quoted price for listed investments at 27 April 2012 or the price at which the last round of financing was raised for unquoted investments. No value has been attributable to the prospects in development. 1 The LionsGate Metals Inc (‘LionsGate’) warrants allow the company to take up one ordinary share in LionsGate to an exercise price of C$1.50. The warrants are fully vested and expire on 10 March 2013.

• 2 The Navaho Gold Ltd (“NVG”) options allow the Company to take up one ordinary share in NVG at an exercise price of $0.20. The options are fully vested and expire on 31 December 2013.

• 3 The AusNiCo Ltd (“ANW”) options allow the Company to take up one ordinary share in ANW at an exercise price of $0.30. The options are fully vested and expire on 19 November 2013.

• 4 The Armour Energy Ltd (“Armour”) options allow the Company to take up one ordinary share in Armour at an exercise price of $0.50. The options are fully vested and expire on 31 August 2014.

• 5 The Archer Resources Ltd (“Archer”) options allow the Company to take up one ordinary share in Archer at an exercise price of $0.20. The options are fully vested and expire on 31 December 2014.

Fig 2: (left) DGR Global building shareholder value

Fig 3: (below) DGR Global resource company creator—Armour Energy raises the bar for the future

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Figure 5
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New Shale Gas Province in Northern Australia

Armour Energy is DGR Global’s energy focussed investment dedicated to the discovery and development of world class gas resources in an extensive new province in Northern Australia (Fig 4). Armour has over 126,000 km[2 ] under gas tenure application in the NT and Queensland (an area equivalent to the size of the United Kingdom). DGR Global holds 25% of Armour Energy following an AUD75.0M IPO and

rich Barney Creek Shale which has scope to host up to 40TCF of gas. Previous exploration drilling for zinc encountered numerous shows of gas condensate, oil and bitumen.

The area is also prospective for large shale gas resources which are expected to be comparable to, or rival, shale gas resources contained within known shale gas basins in the USA. Shale gas development and production relies on the release of gas from artificially fractured low permeability gas bearing shales which are penetrated by radiating horizontal lateral holes drilled off a vertical centre well.

ASX Listing. Within the Figure 4 granted Northern Territory Exploration Licence areas Armour has identified a core target area located within and adjacent to the fault D’Aguilar Gold holds bounded structure known as 35.2 million shares the Batten Trough (Fig 5). representing 15.6% The target sediments are the of Solomon Gold plc. thickened sections of the gas

The target shales are “dry” (not aquifers) and do not interact with groundwater. Armour’s well depths are targeted at between 500 and 1500 metres within the project area. During the Quarter Armour carried out significant preparation and mobilisation for seismic testing and drill pad establishments on NT tenements. Armour Energy has acquired a strategic stake in ASX listed Lakes Oil NL (LKO).

The Company subscribed AUD2.25M to purchase 900 million shares in Lakes Oil at 0.25 cents per share representing a 13% interest in the Company. Armour Energy was also granted a right to maintain its interest in Lakes Oil through participation in any subsequent capital raisings by Lakes Oil.

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Figure 5
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Two Armour Energy Directors have been appointed to the Lakes Oil Board of Directors.

Lakes Oil agreed to provide Armour Energy with farm-in rights and acquisition options over certain of its assets as follows:

• Right to earn 51% and assume operatorship of PEP169 in the Otway Basin in south western Victoria by drilling the Moreys Prospect with a AUD2.5M well targeting a P50 recoverable prospective resource of 46BCF gas in the Waarre Sandstone. The Moreys Prospect is adjacent to numerous gas fields operated by Origin Energy and proximal to existing pipeline infrastructure.

• Right to earn a 51% interest in PEP166 within the onshore Gippsland Basin, with a total expenditure of AUD9.0M over two years, targeting large unconventional gas reserves. Under the farm-in agreement Armour Energy will expend a planned AUD4.25M during year 1 of the agreement to drill the planned Holgate 1 Well on the Baragwanath Anticline along with a second cored hole on the YallournMorwell Anticline to earn a 25% interest in PEP166. This will be followed by a commitment of AUD4.75M in year 2 of the agreement to complete the 51%

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program in the Lakes Oil project areas commenced on 19 April 2012 with the spudding of the Moreys 1 well on PEP 169. The well is expected to reach target zone at the end of April.

interest and assume operatorship of PEP166.

• An option to acquire half of Lakes Oil’s interest in the Trifon and Gangell blocks within PRL2 and a 25% interest in the balance of PRL 2 at any time in the next three years in consideration of payment of AUD30.0M. Option fees of AUD100,000, will be paid, on signing, thereafter AUD200,000 after year 1 and AUD300,000 after year 2.

Figures 6 and 7 below show the location and extent of PEP166, PEP 169 and PRL2.

Armour Energy is pleased to acquire substantial interests in highly prospective gas and oil acreage in the onshore sectors in the Gippsland Basin, Australia’s most prolific oil and gas producing province.

D’Aguilar Gold holds The prospectivity offered by the onshore section of the 35.2 million shares Gippsland Basin has, to date, been poorly understood and representing 15.6% Armour Energy looks forward to the investigation of this of Solomon Gold plc. opportunity to add a second gas province to its portfolio. Armour Energy’s

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Photo above: Lucas Soilmech 100 drill rig to be used at Cow Lagoon #1 well, the first well on Armour’s Northern Territory tenements—due to spud in early May

Fig 6 Lakes Oil’s Otway & Gippsland Basin Interests (Lakes Oil 2011 Annual

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Fig 7 Lakes Oil’s PEP166 & PRL2 (Lakes Oil 2011 Annual Report)

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Porphyry Copper-Gold-Silver-Molybdenum

Archer is focussed on the discovery and development of porphyry copper gold silver molybdenum deposits in south east Queensland and after an AUD2.0M seed raising is a 67% owned subsidiary of DGR Global Limited. Archer has 7 key project areas in eastern Queensland- Peenam, Mt Abbott, Gayndah and Calgoa (which already host encouraging drill intersections) and Great Blackall, Pinnacles and Anduramba . Location of these exploration tenements is shown in Fig 8. DGR Global has also transferred two ELs in the Central Lachlan Fold Belt near Bathurst to Archer. These contain an exciting gold-silver Project at Caloola which already has an historic (non-JORC) gold occurrence of 235,000 tonnes @ 2.5g/t Au. The deepest historic drill hole CP10 stopped in mineralisation at 96m, later assaying 14m of 3.86g/t Au from 82 metres. D’Aguilar Gold holds

35.2 million shares Between December 2011 and February 2012, Archer representing 15.6% Resources’ subsidiary AimFire Energy Pty Ltd applied for 7 tenement applications in the Permian coal-bearing Arckaringa of Solomon Gold plc. Basin of South Australia. This project is located 75 km NW of Coober Pedy, or 500 km NW of Port Augusta, on the Adelaide to Darwin Rail Link.

The project area has a significant presence of Permian sub-bituminous, high energy, low ash, high moisture thermal black coal. The applications contain numerous coal intercepts in historical drill holes (e.g. 14m net coal thickness, from 186200 m depth on ELA 2011/00297).

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Fig 8: Map Showing location of Archer Resources Tenements

Archer believes there is potential for significant coal resource surrounding the 14m seam on ELA 2011/00297. Gravity images show applications are within prospective (under explored) basins (see Fig 9).

Immediately next to these applications, Altona Energy (LSE: ANR) and Chinese partners CNOOC are currently undertaking an AUD40.0M Bankable Feasibility Study to develop an open-cut coal mining operation and a coal-to-liquids plant to produce 10million barrels of distillate pa for domestic market and export. Altona claim that this basin is “one of the world’s largest untapped energy banks”. Altona report a non-JORC mineralised occurrence of 7.8 billion tonnes, with 1.287 billion tonnes in JORC status.

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Figure 5
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Fig 9 AimFire Energy P/L EL Applications in South Australia

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Iron, Titanium and Bauxite

Iron Ore Prospecting Applications in West Africa

Following extensive research and in country work DGR Global’s London based, new opportunities group have lodged two prospecting applications for iron ore in the west African nation of Gabon.

As evident from the various iron deposits shown in Fig 12, Gabon is a region recognised for hosting iron ore. The country has a stable government, with substantial infrastructure in place and a modern Mining Code (2000).

The northern prospecting application (3,027 km²) is targeting conventional banded iron formations (BIF) hosted hematite. The area is directly south of the the Trans-Gabonese rail line.

Fig 10: Plan of the Monogorilby Central Drilling

Monogorilby Titanium

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During the quarter IronRidge undertook preliminary metallurgical characterisation of material from the top 10m of the area drilled at Central Monogorillby. The holes, located as shown in fig 10, indicated a thick zone of titanium enriched tuffs over an extensive area (as shown in figure 11)

The testing was undertaken on individual 1 metre samples between the surface and 10 metres, and also on a composite 10 metre sample. The composite sample was sized in different fractions, and the –1mm / +45cm material then separated at SG2.85. While only 32% of the original mass, the resulting grade of 8.5% TiO2, 47% Fe2O3 and 25% A12O3 provides a starting base as a potential feed to a hydrometallurgical process to recover three separate products.

Fig 11: Section through the Monogorilby Central Deposit (Holes 32 – 38)

There are ready exploration targets evident in magnetic anomalies, and the project presents the potential for the discovery of direct shipping iron ore .

The southern prospecting application (2,937 km²) is targeting a potential magnetite deposit. It is along strike from known iron occurrences, but in an area that has not seen any "modern era” exploration. The project area is 105 km from Mayumba Port.

Fig 12: IronRidge Prospecting Applications in Gabon

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Gold, Silver and Copper

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DGR geoscientists have identified an underexplored area of New South Wales which exhibits great similarities to previous discoveries by former subsidiary Central Minerals Pty Ltd (now part of Solomon Gold plc – LSE.AIM: SOLG) at Rannes in Queensland, and the North Bowen project area held by associated company Navaho Gold Limited (ASX: NVG) as shown in Fig 13. All three areas (Central, Navaho and Pinnacle) flank the eastern side of the Bowen Sydney Basin, exhibit strong structure with aligned magnetic intrusives and feature calcareous and tuffaceous host rocks.

DGR Global subsidiary Pinnacle Gold Pty Ltd has now secured a substantial exploration ground position west of the Peel Fault and north of Manilla, NSW. Pinnacle lodged 8 Exploration Licence Applications covering more than 2,400km[2] . These exploration licence areas are shown in Fig 14. Seven (7) of these applications have now been granted. Landowner access agreements have been finalized on the first of the granted tenements and initial field work has recently commenced on EL 7859.

Exploration activity on the Pinnacle Gold tenements will initially focus on a 50km long structure dotted with historical gold workings extending south east from Barraba, and a 28km long parallel structure to the west. These structures are very evident on the surface geological map in Figure 15 and the accompanying magnetic map Figure 16.

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Fig14: Pinnacle Gold exploration tenements on simplified geology

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Fig 13: Significant gold
occurrences associated
with Permo-Carboniferous
Belts and the Sydney Bowen
Basin .
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• . .

Fig16: Eastern Tenements over Magnetics

Fig 15: Eastern Tenements on Geology

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Records of the historic 19[th] century workings in the area, for example from Readings Reef to Tea Tree Creek, shown left in Figure 17 , indicate high grades of visible gold in near surface work on multiple reefs. No previous drilling on these structures has been revealed in research to date, but a report from 1983 indicates good gold values in sheared wall rock associated with one reef

Fig17: Tea Tree Creek— Readings Reef Area EL 7859

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A C T I V I T I E S R E P O R T F O R T H E M A R C H 2 0 1 2 Q U A R T E R

QUARTERLY REPORT

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Corporate Information

DIRECTORS

William Stubbs (Chairman) Nicholas Mather (Managing Director) Brian Moller Vincent Mascolo

ISSUED CAPITAL

At 31 March 2012, DGR Global Ltd had the following securities on issue:

▪ 324,202,760 ordinary shares

COMPANY SECRETARY

Karl Schlobohm

▪ 16 Million (unlisted) 28 cent options expiring 29/11/13

EXPLORATION MANAGER

Neil Wilkins

D’Aguilar Gold holds GENERAL MANAGER 35.2 million shares Greg Runge representing 15.6% REGISTERED OFFICE AND HEAD OFFICE of Solomon Gold plc.

DGR Global Limited Level 13, 145 Eagle Street Brisbane QLD 4000 Phone:+ 61 (0)7 3303 0680 Fax:+ 61 (0)7 3303 0681

AUSTRALIAN STOCK EXCHANGE (“ASX”)

ASX Code: DGR (Ordinary shares)

AUSTRALIAN BUSINESS NUMBER

ABN 67 052 354 837

INTERNET ADDRESS

All Company announcements, reports and presentations are posted on our website www.dgrglobal.com.au

If you would like to receive news releases by email, please send us an email to info@dgrglobal.com.au with the subject “email alerts” or register your details on our website by clicking “Contact Us” and entering your details. Website: www.dgrglobal.com.au

▪ 12 million (unlisted) 28 cent options expiring 28/02/14

▪ 300,000 (unlisted) 28 cents options expiring 28/02/15

SHAREHOLDING ENQUIRIES

Link Market Services Limited manages DGR Global Ltd’s share registry.

If you would like to monitor your shareholding online, you can do so by visiting Link Market Services website: www.linkmarketservices.com.au and follow the instructions.

For issuer-sponsored shareholders, if you change address, or if you have any other queries regarding the details of your shareholding, please contact the Company’s share registry directly: Link Market Services Limited Locked Bag A14 SYDNEY Phone: 1300 554 474

Competent Persons Statement

The information in this report that relates to Exploration Results is based on information complied by Nicholas Mather B.Sc (Hons) Geol., who is a Member of the Australian Institute of Mining and Metallurgy. Mr Mather is employed by Samuel Holdings Pty Ltd which provides certain consultancy services including the provision of Mr Mather as the Managing Director of DGR Global Ltd and a Director of its subsidiaries and associates.

Mr Mather has sufficient experience which is relevant to the style of mineralisation and type of deposit being reported and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2005 Edition of the ‘Australian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’ (the JORC Code). Mr Mather has consented in writing to the inclu sion in this report of the matters based on the information in the form and context in which it appears.

Figure 5

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