EMU NL — Interim / Quarterly Report 2011

Oct 30, 2011

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QUARTERLY REPORT for the Quarter Ended 30 September 2011

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Emu Nickel NL ABN 50 127 291 927

EMU LAKE (Emu earning 33.3%)

ASX Code: EMU

Level 2 16 Ord Street West Perth, WA 6005

T +61 8 9226 4266 F +61 8 9485 2840 E info@emunickel.com.au

PO Box 1112 West Perth, WA 6872

Issued Capital : Shares - Quoted: 59,828,940 fully paid shares

Options – Unquoted: 10,000,000 exercisable at $0.50 by 27.2.2013

1,830,000 exercisable at $0.27 by 22.12.2014

180,000 exercisable at $0.1961 by 21.12.2015

Cash: $5.3 million

Directors:

Peter Thomas Chairman George Sakalidis Managing Director Roger Thomson Executive Director

Emu Nickel has signed a management agreement with joint venturer Xstrata Nickel Australasia Operations (XNAO) whereby XNAO may dilute its interest in the Emu Lake nickel project and Emu assumes management. Emu has earned 80% of Image Resources’ 37.9% interest in the project and has elected to proceed to 100% by sole funding exploration on a package of tenements, including Emu Lake.

During the quarter Emu commissioned nickel specialists Newexco Services Pty Ltd to review the data on the 1,200m-long mineralised contact zones at Binti Gossan and Binti South – see Figure 1. The objective of the study is to assess the practicality of drilling contactparallel drill holes along selected positions near the mineralised contacts in order to use these drill holes as platforms for deep downhole EM surveys to test for massive nickel sulphides on these prospective contacts. This technique has proved successful in discovering significant nickel resources at several nickel deposits in Western Australia including the Silver Swan and Flying Fox nickel deposits. Newexco is currently reviewing the data and formulating recommendations for drilling.

WINDY KNOB (Emu 51%)

The Windy Knob joint venture tenements are situated about 55km south of Meekatharra in the Murchison region of WA, adjacent to the Austin volcanogenic massive sulphide (VMS) discovery made by the Silver Swan Group. The Austin VMS Cu-Zn-Ag-Au mineralisation is close to a joint venture tenement boundary and appears to be plunging towards this boundary at depth. Emu is continuing to model available data on the Austin resource (1.48Mt @ 1.02% Cu, 1.39% Zn, 3.51g/t Ag, 0.24g/t Au) with a view to deep drilling to test the plunge extension to this mineralisation.

Geochemical sampling completed along the Federal Bassett Shear Zone has outlined a 1.7km-long gold anomaly up to 10 x background (range 5-16ppb Au). The gold anomaly forms part of a 5km-long zone of discontinuous weaker gold anomalies along this goldprospective structure. Field work to assess this gold-anomalous zone is in progress.

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Orientation geochemical sampling over the Defiance VMS prospect, an area of known mineralisation with thick transported cover, has indicated that partial leach geochemistry can be used to identify mineralisation below transported cover. Planning is in progress to select target areas under cover where this technique can be applied.

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Figure 1 Binti Gossan and Binti South Longitudinal Projection

KAMBALDA WEST (Emu 30%)

Joint venturer Mincor Resources has completed a 156 line-km ground magnetic survey over magnetic anomalies at Woolgangie where previous drilling by the joint venture had intersected massive iron sulphides associated with airborne EM anomalies. Some of the massive sulphides intersected contain anomalous levels of silver and copper. The results of the ground magnetic survey show a strong magnetic anomaly more than 1.3km in length and 300m in width, as shown in Figure 2. The source of the magnetic anomaly is interpreted to be a banded iron formation or a magnetite skarn. A single RC drill hole is planned to test the peak of this anomaly.

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Figure 2

Woolgangie Ground Magnetic Anomaly with Proposed Drill Hole Location

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MADOONIA DOWNS (Emu 100%)

Emu holds a 100% interest in a 67sq km exploration licence in the Madoonia Downs area about 120km SE of Kalgoorlie. The licence is in two parts, the eastern part covering an ultramafic sequence prospective for nickel and the western part covering a mafic sequence prospective for gold. The eastern part is situated along strike from the Hootan and Talc Lake nickel sulphide prospects, in an area largely covered by alluvium and lake sediments. A programme of scout RAB drilling is being prepared to test this target zone.

The western part is along strike from the Angel Fish Lake gold occurrence, interpreted to be hosted by pyroxene basalt which trends through the Emu tenement. Wide-spaced (400m centres) systematic geochemical sampling has identified several anomalous gold zones (5-10ppb Au compared to a background of 1-2ppb Au). A pronounced 3km-long arsenic anomaly (20-80ppm As compared to a background of 3-4ppm As) has also been identified. Field work to examine the significance of these geochemical anomalies is in preparation.

SALMON GUMS (Emu 100%)

As previously reported, two areas of significant gold responses have been identified in the Lake Pyramid area WSW of Salmon Gums on the interpreted southern extension of the Tropicana gold trend. Negotiations are continuing with landowners in order to carry out further sampling to assess these gold anomalies.

For more information on the company visit www.emunickel.com.au Please direct enquiries to:

Roger Thomson George Sakalidis Technical Director Managing Director Phone (08) 9226 4266 Phone (08) 9226 4266 Mobile 0419 969 183 Mobile 0411 640 337 Email roger@emunickel.com.au Email george@emunickel.com.au

The information in this report that relates to exploration results is based on information compiled or reviewed by Roger Thomson BSc, ARSM, MAusIMM, MAIG. Roger Thomson is a director of Emu Nickel NL. Roger Thomson 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 of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Roger Thomson consents to the inclusion of this information in the form and context in which it appears in this report.

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