ELEMENTOS LIMITED — Interim / Quarterly Report 2013

Jan 30, 2013

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31 JANUARY 2013

QUARTERLY REPORT DECEMBER 2012

Highlights

• Tamaya 5,000 metre drilling program commenced during the quarter

• JORC resource of 36kozs released on Manantiales project, Argentina

• Number of new mineralised structures and targets identified at Santo Domingo

Elementos Limited (ASX: ELT) (“Elementos” or the “Company”) activities this quarter have concentrated on exploration and drilling activities at the Tamaya project in Chile, and on-going partnering discussions at the Santo Domingo and Manantiales projects, Argentina.

TAMAYA, CHILE

The drilling program, the first ever conducted on the property, has been designed to explore the copper-gold potential of the Tamaya project. The aim of the program is to test a number of different mineralisation styles and targets. The program was designed to drill up to 5,000 metres in approximately 15 holes.

The main prospects being targeted during the drilling program include Campanil, Lecaros, San Jose, Tortolas, San Francisco and Arenillas. The first six holes comprising approximately 2,100 metres have been completed. A number of assays are awaited.

Campanil

The Company has drilled three holes and received the assay results for the Campanil Prospect. The exploration target is bulk tonnage, lower-grade, copper oxide mineralisation. A number of zones of copper oxide mineralisation were intersected with grades between 0.15% and 1.0% copper, including:

• TD12-01 - 10.2 metres at 0.32% copper from 3.0 metres, including 1.2 metres at 0.99% copper;

• TD12-02 - 26.4 metres at 0.48% copper from 0 metres, including 7.3 metres at 1.06% copper and 0.125 g/t gold from 5 metres, and 1.4 metres at 1.08% copper from 25 metres; and

• TD12-03 - 1.9 metres at 0.36% copper from 254.0 to 255.9 metres, and 1.95 metres at 0.61% copper from 271.2 to 273.15 metres.

TD12-03 was continued to 413 metres depth in an attempt to intersect the main sulphide vein beneath the intersection achieved in the structure by TD 12-02 in the oxide zone. However, because of the shallow dip to the vein, the hole was subparallel and did not intersect the main structure, but only the narrower subsidiary veining in the altered wallrocks.

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Lecaros

One hole (TD12-04) has been drilled at Lecaros. Two structures were intersected near the surface hosting copper oxide mineralisation in breccia. Fractures with veinlets of pyrite and chalcopyrite occur lower down the hole, which correspond with structures mined at surface. From the evidence of the drilling and mapping, it is apparent that the mineralised structures pinch and swell along strike and to depth. This hole intersected the most easterly structures where they had pinched. The hole was stopped at a depth of 251.5 metres.

San Jose

Hole TD12-05 was the first hole drilled to target the main vein structure at the San Jose prospect, directly beneath the adit to the old San Jose mine.

Hole TD12-05 was drilled to 637 metres without intersecting the main vein. In the last 200 metres, the hole intercepted andesitic rock and then passed into pyroclastic rock (more permeable for mineralisation) for the last 100 metres. In both cases, the rock was highly altered (silica, hematite, tourmaline and chlorite-epidote) and brecciated, with pyrite and minor chalcopyrite. The intensity of the alteration gradually increased with depth, suggesting that the hole was approaching the source of the mineralising fluids – the Main Vein structural system.

The most likely explanation for not intersecting the vein is the shallower dip of the main vein structure compared to that interpreted on surface. Because there is no good access to the western side of the Tamaya hill, it was not possible to drill the hole perpendicular to the structure. It is therefore believed the drillhole trace was sub-parallel to main structure.

Whilst not intersecting the vein was disappointing, the core will be analysed for copper and gold and, should the results be encouraging, it can be drilled deeper in the future using an alternative drilling methodology.

San Francisco

Borehole TD 12-06 was designed to test one of the subsidiary structures on the western side of the Tamaya hill beneath a suite of old mine workings and was completed in January.

From surface down to 124 metres, the hole intersected strongly fractured volcanic rocks, intensely silicified through much of the sequence and hosting copper oxide mineralisation disseminated through the rock and filling fractures to a depth of 109 metres with sulphide mineralisation beneath.

The hole continued to a final depth of 350 metres to target a geophysical (IP) anomaly, which was found to be a strongly magnetic subvolcanic unit. Sections of this unit and the top 124 metres of the hole are to be analysed for copper and gold shortly.

Drilling strategy

The drilling results to date indicate that further drilling is warranted at Campanil to identify a large tonnage copper oxide target. The drilling has confirmed zones of copper oxide mineralisation extending from surface in the wallrocks of the main vein. The mineralisation is visible within the old Campanil workings on the southern end of the Tamaya hill.

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Although hole TD12-05 at San Jose did not intersect the main high-grade structure, alternative drilling locations and methodologies will be reviewed before commencing further drilling at the prospect. The main vein structure remains a primary un-tested target at Tamaya. Key prospective features include:

• the vein system extends for more than three kilometres on surface, and is coincident with both magnetometry and induced polarisation geophysical anomalies;

• voluminous waste rock dumps around San Jose contain significant amounts of high-grade material (0.5 – 5.0% copper) which is subject to extraction by artisanal miners. Since this has been dumped as waste, the source of this material is a priority target;

• extensive surface sampling has demonstrated wide-spread copper mineralisation along the strike extent of the main vein structure, and into the wallrocks surrounding the structure; and

• the main vein was the focus of historical high-grade copper mining where it is reported that up to 2Mt of copper was mined at grades of 12% (nonJORC). It is still considered highly prospective for remnant high-grade mineralisation.

The Company is reviewing its drilling strategy for San Jose before commencing any new holes at this prospect.

In the middle of January the Company decided to change from diamond to reverse circulation (RC) drilling given the issues with intersecting the main structure.

MANANTIALES, ARGENTINA

There were no exploration activities at Manantiales during the quarter. The Company released an inaugural JORC resource for the project. The inferred and indicated in-house resource estimate for the Manantial vein is 36,310 ounces of gold equivalent. The resource estimate is based on 4,559 metres of diamond core drilling and 245 metres of sawn blade channel sampling.

The resource estimate at 0.7 gram per tonne gold cut-off grade is tabulated below:

Cut-off	Category	Tonnes	Gold	Silver	Gold Eq	Gold	Gold
Gold		(Mt)	(g/t)	(g/t)	(Au_Eq	(koz)	Equivalent
(g/t					g/t)		(kozs)
Au)
0.7	Indicated	0.34	1.84	10.56	2.14	19.61	22.76
0.7	Inferred	0.24	1.56	7.99	1.77	11.93	13.55
0.7	Indicated	0.58	1.71	9.40	1.97	31.54	36.31
	and Inferred
Gold equivalency is calculated by the formula: Au_eq g/t = Au					g/t + (Ag g/t ÷	60.00)
“Mt” represents million tonnes and “koz” represents thousand ounces

The Company remains in an unique position at Manantiales to monetise its discoveries through possible standalone development, should a resource of sufficient size be defined. Elementos is in the early stages of assessing various options in relation to the project, including divestment and joint venture.

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SANTO DOMINGO, ARGENTINA

During the quarter the Company completed new mapping and sampling programs at the Divisoria porphyry prospect and identified a number of new prospective mineralised areas.

New Disseminated Mineralisation at the Divisoria Prospect

Follow-up mapping and sampling at the Divisoria porphyry prospect, targeting anomalies highlighted by the 2011 Pole-Dipole Induced Polarisation (“PDIP”) and Audio Magneto Telluric (“AMT”) geophysics programs, has expanded significantly the previously identified disseminated and stockwork mineralisation on surface, within the footprint of the geophysical anomalies.

Highlights from both porphyry-style veinlets and disseminated sulphides, and latestage cross-cutting veins and breccias within the geophysical anomaly include:

Sample type and material	Length	Assay results
Representative panel samples of stockwork veinlets in a porphyry with phyllic alteration	3.0 m 2.0 m 2.0 m	 0.6 g/t gold  0.28 g/t gold  0.31g/tgold
Selective samples of only the “B and D-type” veinlets from within the potassic and phyllic alteration zone	0.2 m 0.2 m 0.1 m 0.4 m	 19.8 g/t gold and 15 g/t silver  9.7 g/t gold  6.7 g/t gold and 10.8 g/t silver  1.18g/tgold and 186g/t silver
Representative samples in late- stage veins and breccias	0.8 m 0.1 m	 7.4 g/t gold and 84 g/t silver  43.1g/tgold and 19.7g/t silver

These samples are all from new localities and represent a significant expansion of the previously recognised mineralisation zone. Recent flooding has exposed new outcrops in the gully bottoms, highlighting the potential for significant new discoveries in the poorly exposed area.

New Epithermal Structures Identified at Divisoria

Narrow, sheeted veinlets of high-grade mineralisation in a strongly altered north-east trending shear zone, similar to the Intermediate Sulphidation Epithermal (“ISE”) mineralisation at Yvette and El Arriero West, have been discovered 250 metres north of the Divisoria porphyry prospect. These are important finds as they are located on the rim of the circular feature that appears to encompass most of the strongest porphyry-style mineralisation, similar to the occurrences recently identified in El Arriero West, but three kilometres from the nearest location of a similar style. Localised sampling returned:

o 0.2 metres at 43.1 g/t gold and 19 g/t silver.

Localised trenching and representative sampling are required to test this prospect.

New High-Grade Structures Identified at Divisoria

Several narrow, high-grade structures have been discovered cross-cutting the earlier porphyry mineralisation, within the metamorphic host rocks. These structures predominantly trend to the north-west, with a lesser set to the north-east.

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The narrow, high-grade structures are characterised as follows:

• Silicified breccias with oxide matrix, mostly cross-cutting early porphyry mineralisation:

• 0.8 metres at 7.4 g/t gold and 84 g/t silver.

This is on the same trend where previous sampling returned:

• 3.22 g/t gold, 50 metres to the south.

• Narrow quartz veins (gold–silver plus polymetallic) cross-cutting both porphyry mineralisation and metamorphic basement, where previous sampling returned values of up to:

• 0.2 metres at 5.6 g/t gold;

• 0.3 metres at 38.8 g/t gold; and

• 0.2 metres at 4.8 g/t gold.

Although not stand-alone targets, these mineralised windows scattered across a district characterised by superficial cover with very little rock outcrop suggest a significant volume potential and increases the overall grade of the deposit by intercepting blind structures near surface.

New El Arriero West Gold Vein System

A new 400 metre long zone of gold-bearing mineralised shear structure has been identified 300 metres to the west of the El Arriero porphyry prospect. Grades of up to 25.5 g/t gold and 35 g/t silver occur in sheeted quartz stockwork veinlets within a larger shear structure. A continuous rock-chip channel sample across the structure assayed 19.7 metres at 2.1 g/t gold and 2 g/t silver, including:

• 0.5 metres at 25.5 g/t gold and 14 g/t silver;

• 0.2 metres at 24.3 g/t gold and 35 g/t silver;

• 0.2 metres at 14.4 g/t gold and 13 g/t silver;

• 0.3 metres at 21.2 g/t gold and 18 g/t silver; and

• 0.2 metres at 12.8 g/t gold and 16 g/t silver.

The main structure encompasses twenty high-grade, steeply dipping, sheeted veinlets within a 20 metre wide shear structure with sericite, silica and calcite alteration. This is hosted by a gabbro intrusion with potassic alteration overprinted by argillic alteration, typical of the margins of a porphyry environment.

The mineralised shear structure occurs along the border of the circular feature that encompasses the three largest porphyry-style mineral prospects at Santo Domingo. The new mineralisation occurs as discrete, high-grade gold, sheeted veinlets in a strongly altered shear zone, typical of an ISE system, and similar to those seen in the Yvette prospect in the east of the property. Further exploration is required to map the extent of the system which is visible on surface along 400 metres of strike length trending north-eastwards.

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Commercial Strategy at Santo Domingo

Discussions are on-going with a number of potential parties interested in acquiring or joint venturing the project, with the financial capacity to explore and develop a large porphyry target.

MILLENIUM, AUSTRALIA

During the quarter, the Company completed a survey of the Millenium exploration permits that were granted during 2012. The aim of the survey was to:

• Review targets previously identified from satellite image interpretations and historic data;

• Assess the suitability of the target areas for the chosen exploration techniques;

• Prioritise the targets for fieldwork, logistics, infrastructure requirements and budgeting purposes;

• Commence mapping programs on early targets; and

• Initiate landowner relations.

Preparations are currently underway for a fast-tracked exploration program in the second quarter 2013, aimed at testing the potential to drill during the year.

Additionally, the Company has been approached by a number of parties interested in forming a joint venture on the Millenium permits and discussions are on-going.

Forte Energy NL is currently renewing the Mining Licences subject to an Option-toPurchase contract with the Company.

CORPORATE ACTIVITIES – RIGHTS ISSUE

During the quarter, the Company completed an underwritten, non-renounceable rights issue to raise approximately $2.3 million (before costs) at 3.5 cents per new share, plus one free option exercisable at 6 cents for every two new shares acquired.

The Offer provided Shareholders with an opportunity to increase their investment in the Company at an attractive price. The Offer was strongly supported by existing shareholders and experienced resource investors, including:

• Andes Investors LLC (“Andes Investors”), an investment company associated with James D. Calaway, a non-executive director of Elementos, acquired its entitlements and was sub-underwriter to a further $0.77 million of the Offer; and

• Other major shareholders including Neil Stuart, a previous director of the Company, Belmont Park Investments Pty Ltd and Panorama Ridge Pty Ltd took up their full entitlements.

CASH RESOURCES

At the end of the period, the Company had cash resources of $1.6 million. In addition, the Company has a $0.5 million bank guarantee on deposit that will be released on completion of the first 5,000 metres of drilling at Tamaya.

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For more information, please contact:

Corey Nolan

Managing Director Phone: +61 (7) 3221 7770 Email: admin@elementos.com.au

Elementos is an Australian, ASX-listed, copper and gold exploration company, with projects in Argentina, Chile and Australia. The properties are all in mineral rich, highly prospective provinces, with developed infrastructure nearby.

Please visit us at www.elementos.com.au

COMPETENT PERSON STATEMENT

The information in this Prospectus that relates to Exploration Results, Mineral Resources or Ore Reserves at the Company‟s Tamaya - Chile, Millenium - Australia and Selwyn South - Australia projects, is based on information compiled by Mr Alistair Grahame, a member of the Australian Institute of Geoscientists. Mr Grahame is a full-time employee of the Company and has sufficient experience which is relevant to the style of mineralisation and types of deposits 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 Grahame consents to the inclusion in the Prospectus of the matters based on his information in the form and context in which it appears.

The information in this Prospectus that relates to Exploration Results, Mineral Resources or Ore Reserves at the Company‟s Mercedes - Chile, Manantiales - Argentina and Santo Domingo - Argentina projects, is based on information compiled by Mr Gustavo Delendatti, a member of the Australian Institute of Geoscientists. Mr Delendatti is a full-time employee of the Company and its subsidiaries, and has sufficient experience which is relevant to the style of mineralisation and types of deposits 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 Delendatti consents to the inclusion in the Prospectus of the matters based on his information in the form and context in which it appears.

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Appendix 5B Mining exploration entity quarterly report

4Rule 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, 01/06/2010.

Name of entity

ELEMENTOS LIMITED

	ABN 49 138 468 756 Consolidated statement of cash flows		Quarter ended (“current quarter”) 31 DECEMBER 2012	Quarter ended (“current quarter”) 31 DECEMBER 2012
			31 DECEMBER 2012
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) Net Operating Cash Flows		Current quarter $A’000		Year to date $A’000
		(1166) (325) 8		(1771) (781) 17
		(1483)		(2535)
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)		(0)		(0)
		(0)		(0)
		(1483)		(2535)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(1483)	(2535)
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: Cost of share issue (adjust for IPO) Net financing cash flows	2312 (198)	2312 (198)
	2114	2114
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	631 960 (3)	(421) 2013 (4)
	1588	1588

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
		85
		Nil
1.25	Explanation necessaryfor an understandingof the transactions

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

Nil

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Nil

• See chapter 19 for defined terms.

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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 used $A’000
	Nil	Nil
	Nil	Nil

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	700
	Nil
	Nil
	325
Total	1025

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 5.4 Other (provide details)	1526	960
	62	0
Total: cash at end of quarter(item 1.22)	1588	960

Changes in interests in mining tenements

Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
EPM19375	Exploration Permit	-	100%

• See chapter 19 for defined terms.

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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)	Amount paid up per security (see note 3)
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	148,352,638	148,352,638
	65,908,220 60,892	65,908,220 60,892	3.5 cents 4.3 cents	3.5 cents 4.3 cents
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) Listed Options Unlisted Options 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	32,952,052 4,500,000 1,500,000 1,200,000 500,000 1,000,000 400,000	32,952,052 Nil Nil Nil Nil Nil Nil	Exercise price 6.0 cents 22.6 cents 30.0 cents 22.6 cents 22.6 cents 32.6 cents 6.0 cents	Expiry date 9 April 2014 23 October 2015 23 December 2013 7 September 2015 30 November 2015 18 January 2017 3 December 2016
	32,953,451 400,000	32,953,451 400,000	6.0 cents 6.0 cents	9 April 2014 3 December 2016
	1,399	1,399	6.0 cents	9 April 2014
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

• See chapter 19 for defined terms.

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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 gives a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 31 January 2013 (Director/Company secretary)

Print name: Linda Scott

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.

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