DREADNOUGHT RESOURCES LTD — Capital/Financing Update 2012

Sep 9, 2012

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Australian Securities Exchange Announcement

10 SEPTEMBER 2012

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----- Start of picture text ----- M I N I N G----- End of picture text -----

The Manager ASX Market Announcements Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000

ERO Mining Ltd and Monax Alliance sign agreement for exploration over the Northern Gawler Craton IOCGU Project

HIGHLIGHTS

• Agreement provides Monax Alliance with a four-month exclusivity period to undertake technical due diligence on the project.

• Prominent gravity target of potential Iron Oxide Copper Gold style already identified.

• Detailed gravity survey planned to commence before end September 2012.

• Subsequent to successful initial phase, Monax Alliance will have the option to enter into a farm-in agreement to earn an 80% interest in the project for the expenditure of $US4 million.

ERO Mining Limited ACN 119 031 864

Level 3, 100 Pirie Street Adelaide South Australia Phone 61 7324 3195 Fax 61 8 8132 5576 Email info@eromining.com web www.eromining.com

The Board of ERO Mining Limited (“the Company”) is pleased to announce that the Company has entered into a Non-Binding term sheet (“Agreement” or “Term Sheet”) with Monax Alliance Pty Ltd a wholly owned subsidiary of Monax Mining Ltd (“Monax Alliance”) to undertake technical due diligence on the Northern Gawler Craton Project. For further information regarding the Monax Alliance, refer to the Monax Mining Ltd (ASX:MOX) announcement dated 10 September 2012.

The Northern Gawler Craton Project comprises two granted tenements, EL4019 and EL4020 owned 100% by ERO Mining, covering an area totalling 439 km[2] and is located approximately 1100 km north–northwest of Adelaide,

and approximately 50 km east of the township of Marla (Figure 1).

The project consists of two primary targets (one each at Welbourn Hill and Nicholson) and was explored by the Company in 2008–09 targeting iron-oxide, copper, gold mineralisation of the Olympic Dam type. At the time drilling undertaken by ERO Mining over the Welbourn Hill target, intersected weak copper mineralisation, associated with a three milligal gravity anomaly, and an offset, deeper-sourced magnetic anomaly. The drilling failed to adequately explain the cause of the gravity anomaly. An intersection of 19 m @ 0.1% copper from 639 m depth was reported from the drilling program.

ERO Mining Limited 1

Under the term sheet signed with ERO Mining, Monax Alliance has a four month exclusivity period to undertake technical due diligence on the project. Monax Alliance will undertake a 900 station, detailed gravity survey to assist with modelling and target delineation. Modelling of the currently available gravity data shows that the drilling by ERO Mining has not adequately explained the significant gravity anomaly.

In addition, Monax Alliance may undertake a detailed heli-bourne magnetic survey to assist with modelling the depth of the prominent magnetic feature, which is offset to the gravity feature.

Subsequent to the expiry of the four-month period, or earlier if successful due diligence is completed sooner, Monax Alliance will have the option to enter into a farmin agreement for all minerals. The details of the farm-in agreement are yet to be finalised but contemplate Monax Alliance, as managers of the joint venture, having the option to invest up to $US4 million over a three (3) year period to earn an 80% interest in the project, subject to a minimum firm commitment of US$400,000. Subsequent to Monax Alliance meeting this requirement ERO Mining Ltd may elect to contribute to ongoing exploration expenditures or dilute its equity in the project to a minimum of 10%. If the Company’s equity in the project reduces to less than 10% then the remaining equity will convert to a 1.5% net smelter royalty, which is purchasable at any time for US$2 million.

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----- Start of picture text ----- Coongra 1Nicholson 1EL4019 EOB 2EL4020Nicholson 2- 27º20'EL4050WHD 2Diamond DrillholeHistoric DrillholeFault0 5 kmGravity Contour134º 134º20'----- End of picture text -----

Gravity contours over magnetic image, North Gawler Craton project.

ERO Mining is excited at the prospect of advancing the exploration of these quality IOCGU targets in partnership with Monax Alliance.

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Mr Kevin Lines

For further information please contact:

Duncan Gordon

Adelaide Equity, t (08) 8232 8800, m 0404 006 444

Chief Executive Officer

10 September 2012

Further information relating to ERO Mining Limited and its various exploration projects can be found on its website: www.eromining.com

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Kevin Lines who is a Member of the Australasian Institute of Mining and Metallurgy, and who has sufficient experience relevant to the style of mineralisation, the type of deposit under consideration, and the activity 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 (the JORC Code). This report is issued in the form and context in which it appears with the written consent of the Competent Person, who is Chief Executive Officer of the Company.

2 ERO Mining Limited