FireFly Metals Ltd. — Interim / Quarterly Report 2010

Jul 29, 2010

Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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For immediate release 30 July 2010

Monax Mining Limited Quarterly Report For the period ending 30 June 2010

HIGHLIGHTS

• Maiden drilling program completed at the Melton Copper-Gold Project (South Australia - SA). Assays from first drill hole MIRDD01 report 21m @ 0.11% Cu from 451m. Assays from two further holes in Miranda target at Melton expected in coming weeks.

• Drilling program completed at Waddikee manganese/iron project (SA) with best intersections of 10m @ 17.5% Mn (including 2m @ 26.7% Mn), 4m @ 17.4% Mn, 3m @ 21.2% Mn and 3m @ 19.8% Mn reported.

• Highly encouraging iron results from Waddikee drilling with up to 20m @ 32.1% Fe (including 14m @ 35.1% Fe), 7m @ 31.3% Fe and 10m @ 28% Fe reported.

• New tenement application (ELA 44/10 – Yeltacowie) adjoining Punt Hill within highly prospective Olympic Iron Oxide Copper-Gold belt (SA).

• Option Deal signed over three tenements on the Cape York Peninsula (far northern Queensland) highly prospective for bauxite.

• New tenement (EL 4413 – Mt Boothby) in the southeast of South Australia with manganese potential granted. Preliminary rock chip sampling reported manganese up to 41.5%.

• Monax seeking joint venture partner for Kangaroo Island base metal and gold project (SA).

Quarterly report for the period ending June 30 2010

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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Corporate

Capital Raising

During the quarter, Monax placed 10.5 million shares to professional and sophisticated investors at $0.010 (10 cents) per share raising $550,000 (before costs). The capital raised from the placement will be used to fund exploration on the newly acquired bauxite tenements.

Exploration

South Australian Projects

Monax has four core South Australian projects (Figure1). During the quarter, Monax was granted EL 4413 at Mt Boothby, located in the southeast of South Australia.

1. Punt Hill – copper, gold

2. Melton – copper, gold, uranium (JV with Marmota Energy)

3. Waddikee – manganese, iron (farmin with OM (Manganese) Limited)

4. Kangaroo Island – zinc, lead, gold

Punt Hill Project (Monax 100%)

Monax has increased its tenement position with the application for a tenement adjoining EL 3457 (Figure 2). Exploration Licence Application (ELA) 44/10, which is currently in the grant process increases Monax’s landholding to approximately 1200 km[2] within the Olympic Iron Oxide Copper Gold Belt. Monax expects the new tenement to be granted by the end of August 2010. ELA 44/10 is located approximately 15 km west of Carrapateena and available gravity data shows several promising gravity targets (Figure 2).

A review of the PIRSA exploration database shows two diamond drill holes which intersected basement rocks. Both drill holes (HUD1 & HUD2) were not drilled targeting significant gravity features (Figure 2). The drill holes intersected felsic Gawler Range Volcanics (GRV) in the range 368m to 375m below the surface demonstrating the basement rocks will potentially be shallower on this tenement.

Monax will recommence exploration on this project when the new tenement is granted by undertaking further gravity surveys on both ELA 44/10 and EL 3457 to better define potential drilling targets. Monax had previously planned to drill test the Gopher and Otcheck targets defined by detailed gravity surveys on EL 3457. Monax plans to drill test both tenements concurrently to reduce mobilisation and Aboriginal heritage clearance costs.

Geophysical modeling of the Gopher anomaly predicts the gravity target to be between 250450m below the surface. Monax is still modeling the data from the Otcheck target, but expects the basement to be deeper than the Gopher target. The Otcheck target is located in a similar northwest trending gravity ridge to the Groundhog prospect where drilling by Monax

Quarterly report for the period ending June 30 2010

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950 Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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ABN: 96 110 336 733

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reported 159m @ 0.47% Cu, 0.12 g/t Au, 5.3 g/t Ag, 0.48% Zn & 0.12% Pb (from 846m); including 17m @ 1.1% Cu, 8.5 g/t Ag & 1.2% Zn from 853m (GHDD6).

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Figure 1: Location of Monax’s Core South Australian Projects

Immediately after ELA 44/10 is granted, Monax will commence the process of gravity surveying and gaining access for drilling on both tenements, with a view to commence drilling in late 2010.

Quarterly report for the period ending June 30 2010

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

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ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999

www.monaxmining.com.au

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Figure 2: Location of ELA 44/10 adjacent to EL 3457, including two new prospects at Gopher and Otcheck. Yellow dots represent Monax drill holes on EL 3457.

Quarterly report for the period ending June 30 2010

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950 Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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ABN: 96 110 336 733
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Melton Project (50:50 Joint Venture with Marmota Energy Limited)

The maiden drilling program at the Melton copper-gold project was completed during the quarter. Results from the first hole MIRDD01 reported 21m @ 0.11% Cu from 451m. Results from drill holes MIRDD02 and MIRDD04 are expected in the coming weeks.

The Melton drilling program comprised seven holes for a total of 3378.4 metres with four holes completed on the Miranda target, two holes at North White Cliffs and one hole on the Melton target. Basement rocks were intersected at ~200m depth on the Miranda target, whilst the basement was deeper at North White Cliffs and Melton targets.

Down hole EM surveys will be undertaken on two holes at Miranda in the search for potential zones of sulphide mineralisation. Figure 3 shows the location of the completed drill holes on the Miranda anomaly..

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Figure 3: Location of completed drill holes at the Miranda Prospect

Quarterly report for the period ending June 30 2010

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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Waddikee Project (Monax 100%; OM (Manganese) Limited earning 60% interest in manganese and iron)

The recent drilling program comprised 83 holes totalling 4565 metres with 13 of the planned 14 drilling traverses successfully completed. A total of 905 samples were analysed and results for the initial 670 samples received. The highest individual 1m sample for manganese was 28.59% Mn (hole JTRC069, 27-28m) and for iron was 49.43% Fe (hole JTRC054 18-19m).

Manganese Results

The drilling program was undertaken to test recent mapping and auger soil program which demonstrated the manganese at the Jamieson Tank prospect has a strike length of 5km comprising up to at least six separate horizons. The drilling program was undertaken on traverses 200m apart testing the highly encouraging auger sampling results.

With the success of the auger drilling program in sampling the manganiferrous horizons below sand and soil cover, Monax is testing regional targets which have been defined by previous calcrete sampling in the area. Monax recently acquired a large regional calcrete dataset covering much of the Waddikee project area. The data has outlined several areas of anomalous manganese and these areas will be targeted with the auger program, which commenced on 22 June.

Manganese was intersected in a significant number of holes with the best intersections being:

• 10m @ 17.5% Mn (JTRC069 26 – 36m) including o 2m @ 26.7% Mn (26 – 28m)

• 4m @ 17.4% Mn (JTRC053 15-19m)

• 3m @ 19.8% Mn (JTRC057 18 - 21m)

• 3m @ 17.7% Mn (JTRC057 30 – 33m)

• 3m @ 21.2% Mn (JTRC067 28 – 31m)

• 3m @ 18.2% Mn (JTRC089 22-25m)

• 3m @ 18.3% Mn (JTRC095 33-35m)

• The recent drilling results complement the initial drilling results which included 2m @ 34% Mn in drill hole JTRC034.

Table 1 presents all significant intercepts of manganese (>14% Mn) and location of drill holes is shown on Figure 4.

Iron Results

The drilling program was targeting manganese reported from the recent auger and geological mapping programs, not targeting the iron-rich horizons observed within the regional magnetic data. As part of the drilling program however, selected intervals were assayed for their iron content. The best results include:

Quarterly report for the period ending June 30 2010 ~ 6 ~

Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999

www.monaxmining.com.au

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• 20m @ 32.1% Fe (JTRC054 5 – 25m) and 8m @ 25.9% Fe (JTRC054 31 – 39m)

• 7m @ 31.3% Fe (JTRC067 11 – 18m)

• 10m @ 28.0% Fe (JTRC065 22 – 32m)

• 5m @ 27.3% Fe (JTRC053 19 – 24m)

• 5m @ 28.1% Fe (JTRC068 38 – 43m)

Previous drilling at Jamieson Tank by Monax reported 22m @ 25.1% Fe (JTRC005), 24m @ 28.4% Fe (JTRC014), 20M @ 33.8% Fe (JTRC042) and 16m @ 34.6% Fe (JTRC043). Previous drilling at the Polinga prospect reported 44m @ 34.6% Fe (PRC0001).

- Table 1: Significant Mn results (using 14% cut off)

**Drill Hole No. **	Interval (m)	Metres	Grade (% Mn)	Fe (%)	P(%)
JTRC049	14-15	1	15.6	10.6	0.06
JTRC050	24-25	1	20.4	11.2	0.07
JTRC053	15-19	4	17.4	18.0	0.13
JTRC055	36-38	2	15.4	11.7	0.09
JTRC056	34-37	3	16.4	8.3	0.10
JTRC057	18-21	3	19.8	12	0.06
JTRC057	30-33	3	17.7	8.2	0.03
JTRC058	70-71	1	16.6	10.2	0.08
JTRC067	28-31	3	21.2	8.7	0.02
JTRC067	36-38	2	21.7	8.7	0.05
JTRC069	26-36	10	17.5	7.8	0.05
JTRC079	23-26	3	14.9	12	0.18
JTRC080	20-22	2	17	17.7	0.07
JTRC083	9-12	3	14.3	13.3	0.03
JTRC083	15-16	1	19.8	6.8	0.03
JTRC084	39–40	1	16.5	10.7	0.04
JTRC086	13-15	2	17.4	9.9	0.06
JTRC088	38-39	1	18.9	12.5	0.07
JTRC089	22-25	3	18.2	10.2	0.03
JTRC094	8-9	1	15.8	7.7	0.02
JTRC095	22-23	1	24.6	8.3	0.04
JTRC095	32-35	3	18.3	8.2	0.02
JTRC096	9-10	1	19.4	10.5	0.03
JTRC098	5-6	1	20.8	6.7	0.02
JTRC099	23-24	1	16.2	8.6	0.08
JTRC100	35-37	2	16.2	10.8	0.07

(all holes drilled 60 ~~[o ]~~ to the west, samples split with 3 stage splitter. Down hole lengths, true width unknown. Analysis by Genalysis via XRF.)

Quarterly report for the period ending June 30 2010

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

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ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999

www.monaxmining.com.au

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Figure 4: Drill hole location plan highlighting drill holes with intersections >14% Mn (background regional magnetic data)

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

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ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999

www.monaxmining.com.au

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Kangaroo Island Project (Monax 100%)

No field work was undertaken during the quarter on this project. After undertaking a substantial review of the Company’s core projects, Monax has decided to seek a joint venture partner to help move this project forward. Data processing of the recent heli-mag and IP surveys is being completed, providing additional information to the geological model and defining zones that require further drill testing.

Mt Boothby Project (Monax 100%)

EL 4413 Mount Boothby is located in the southeast of South Australia, 5km west of the township of Coonalpyn. The tenement was acquired due to the presence of a manganese prospect on the PIRSA SARIG database. A short reconnaissance field trip was undertaken to evaluate the site. The manganese occurrence appears to be a replacement horizon within the limestone unit which is a favourable and common form of manganese mineralisation. Analytical results for five rock chip samples were extremely encouraging, with manganese between 27% and 41.5% (see Plate 1). The results presented below demonstrate favourably low levels of deleterious elements.

Sample	Mn %	Fe %	SiO2 %	P2O5 %	S %	Al2O3 %
37395	39.26	1.22	3.91	0.074	0.005	1.25
37396	39.15	0.21	1.21	0.084	0.006	0.34
37397	27.09	4.67	1.54	0.1	0.009	0.39
37398	39.54	0.75	2.85	0.138	0.01	1.54
37399	41.54	0.87	0.75	0.179	0.008	0.21

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Plate 1: Sample of manganese from Mt Boothby

The extent and nature of the manganese on EL 4413 is unknown and Monax is planning a shallow drilling program to test the extent and thickness of the manganese.

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950 Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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ABN: 96 110 336 733

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Queensland Projects

Monax currently has two active projects located in northern Queensland (Figure 5):

1. Cape York Bauxite

2. Percyvale Gold

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Figure 5: General location of Monax Queensland Projects

Cape York Bauxite Project

During the quarter, Monax signed an Option Deal with Callabonna Uranium Ltd (ASX:CUU – formerly MKY Resources Ltd) for three EPM Applications within the highly prospective Cape York Peninsula. Under the terms of the agreement, Monax will pay a $50,000 Option Fee, which provides Monax the rights to explore the tenements for a period of two years. At the completion of the first twelve month option period, if Monax wishes to continue with exploration, the Company makes a payment of $500,000. At the completion of the second

Quarterly report for the period ending June 30 2010

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950 Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

ABN: 96 110 336 733

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year, if Monax wishes purchase the tenements outright it will make a payment of $250,000 to Callabonna. Monax will also make a final payment of $A2 million upon the completion of a successful pre-feasibility study.

Monax believes this project offers the Company significant exposure to a commodity which is considered to have excellent growth capacity, with demand for bauxite estimated to increase significantly as supply and quality decreases from other sources including Indonesia. The Cape York Peninsula is considered to represent the premier bauxite province in the world, with two major mining operations at Weipa (Rio Tinto) and Aurukun (Chalco Australia Ltd – a subsidiary of Chinalco). Cape Alumina’s Pisolite Hills deposit also located on the Cape York Peninsula is due to commence production in 2013/14.

Included within the Option Deal are three current tenement applications (see Table 2), which cover an area of approximately 385 km[2] (Figure 6). All three tenements are currently being advertised, which is the first stage of the granting process. Monax recently announced an Option Deal with Delminco covering five EPM Application areas on Cape York and also submitted three EPM Applications, taking the total project area to approximately 2272 km[2] (Table 2).

The three tenements all contain bauxite and prominent zones of topographic highs are evident from examination of satellite imagery. The three tenements contain approximately 132 km[2] of mapped bauxite and are located near current large bauxite operations of Rio Tinto and Alcan as well as adjoining the Chalco Aurukun deposit and Cape Alumina Pisolite Hills deposit (Figure 6). The mapped bauxite located to the southeast of the MDL 378 is currently unavailable for exploration.

A roadside borrow pit is located on EPM 17836 and contains bauxite (Plates 2 & 3).

Table 2: Tenement details for Monax Cape York Bauxite Project (Three EPM Applications reported shown in italics)

Tenement	Tenement Name	Status	Tenement Holder	Sub-blocks	Area **(km2) **
EPM 17835	Napranum	Application	Callabonna Uranium Ltd	21	58
EPM 17836	Aurukun North West	Application	Callabonna Uranium Ltd	60	168
EPM 17843	Mission River	Application	Callabonna Uranium Ltd	57	159
EPM 16963	Pretender Creek C	Application	Delminco Pty Ltd	98	274
EPM 16964	Pretender Creek D	Application	Delminco Pty Ltd	50	140
EPM 17005	Kendall River B	Application	Delminco Pty Ltd	100	280
EPM 17006	Archer River	Application	Delminco Pty Ltd	100	280
EPM 17715	Pretender Creek E	Application	Delminco Pty Ltd	96	269
EPM 18304	Pretender Creek	Application	Monax Mining Ltd	41	115
EPM 18403	Holroyd River South	Application	Monax Mining Ltd	94	263
EPM 18404	Holroyd River North	Application	Monax Mining Ltd	95	266

Quarterly report for the period ending June 30 2010

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950

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ABN: 96 110 336 733

Tel: +61 8 8375 3900 Fax: +61 8 8375 3999

www.monaxmining.com.au

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Figure 6: Location of Monax’s tenements in the Aurukun-Weipa area (background = regional geology showing zones of mapped bauxite – highlighted zones only relate to Monax tenements).

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Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950 Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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ABN: 96 110 336 733

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Plate 2: Borrow pit developed in bauxite on EPM 17836 (Photo courtesy of Callabonna

Uranium Ltd)

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Plate 3: Detailed view of bauxite “pisolites” within borrow pit shown above (Photo courtesy of Callabonna Uranium Ltd)

Quarterly report for the period ending June 30 2010 ~ 13 ~

Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950 Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

ABN: 96 110 336 733

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Percyvale Gold Project

During the quarter, Monax signed an Option Deal over four granted gold Mining Leases in the Percyvale area, northern Queensland. The four Mining Leases are listed below:

Lease No.	Name	Expiry Date	Size(hectares)
ML 3366	Union	31 July2016	23.6
ML 30199	PercyWest	30 June 2016	32
ML30139	Josephine	31October 2014	6.36
ML 30103	Homeward Bound	30 September 2013	2.63

The four Mining Leases are currently held by the landowner and visible gold has been found on all four leases. Previous drilling and costeaning at the Union Mining Lease reported very encouraging results and Monax is planning to undertake an IP survey to assist in defining extensions to the known mineralisation.

Reconnaissance field inspection and rock chip sampling has been completed and initial results are highly encouraging. Gold up to 119 g/t was reported from the Josephine Lease with elevated silver (up to 830 g/t Ag), copper (up to 5.62% Cu) and lead (up to 11.43% Pb - see Table 3). Ore from the Homeward Bound Lease is polymetallic with gold up to 71 g/t, silver up to 1258 g/t, copper up to 17.08%, lead up to 3.93% and zinc up to 15.52% reported (Table 1). Four samples from the Vicars Lease reported gold up to 4.19 g/t gold and 192 g/t silver (Table 3).

Five samples were collected from the Cranky Dick line of lode at the Union Mining Lease with gold up to 28.41 g/t reported (Table 3). This area has not received much exploration and the reef extends for approximately 400m in length and is up to 10m wide in places. Monax is planning an IP survey followed by shallow RC drilling to test the gold potential of the four mining leases.

For further information please contact:

Gary Ferris, Managing Director, Monax Mining Ph: (08) 8375 3900 Email: info@monaxmining.com.au

‘The information in the Annual Report that relates to Exploration Results, Mineral Resources, Ore Reserves or targets is based on information compiled by Mr G M Ferris, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Ferris is employed full time by the Company as Managing Director and, has a minimum of five years relevant experience in the style of mineralisation and type of deposit under consideration and qualifies 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 Ferris consents to the inclusion of the information in this report in the form and context in which it appears.’

Quarterly report for the period ending June 30 2010

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ABN: 96 110 336 733

Exploration Office Warehouse I, 5 Butler Blvd Burbridge Business Park Adelaide Airport SA 5950 Postal Address PO Box 247 Export Park SA 5950 Tel: +61 8 8375 3900 Fax: +61 8 8375 3999 www.monaxmining.com.au

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– Table 3: Rock chip sampling Results Percyvale Mining Leases

Site	ML	Samp No	Au (ppm)	Au-Rp1	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
Jos 01	Josephine	95689	1.77		404	**5.62 **	5.98	0.36
Jos 01	Josephine	95690	26.21		232	5.05	0.91	0.07
Jos 01	Josephine	95691	119.73	40.54	390	0.88	0.79	0.05
Jos 01	Josephine	95692	20.9		71	0.59	0.92	0.14
Jos 02	Josephine	95693	0.2		5	0.05	0.09	0.01
Jos 03	Josephine	95694	1.02		830	0.64	11.19	0.03
Jos 03	Josephine	95695	1.23		20	0.14	0.85	0.18
Jos 04	Josephine	95696	0.14		2	0.01	0.03	0.01
Jos 04	Josephine	95698	1.35		134	0.20	11.43	0.03
Jos 05	Josephine	95697	0.22		26	0.15	1.72	0.02
Jos 06	Josephine	95699	0.12		3	0.08	0.04	0.00
Jos 07	Josephine	95700	0.02		X	0.03	0.02	0.01
Jos 08	Josephine	295001	0.23		63	0.29	0.30	0.01
Jos 08	Josephine	295002	0.1		33	0.11	0.57	0.19
Hb 01	Homeward Bound	295016	71.78	64.13	1258	17.08	1.12	6.76
Hb 01	HomewardBound	295017	71.47	72.44	524	7.70	0.14	0.09
Hb 01	Homeward Bound	295018	12.19	11.74	703	5.33	3.93	15.52
Vic 01	Vicars	295019	0.05		4	0.03	0.03	0.02
Vic 02	Vicars	295020	0.17		12	0.14	0.03	0.09
Vic 03	Vicars	295021	4.19		21	0.24	0.07	0.01
Vic 04	Vicars	295022	1.55		192	0.16	0.71	0.12
Un 01	Union	295023	18.75	18.08	7	0.02	0.01	0.00
Un 02	Union	295024	13.79	13.57	10	0.02	0.04	0.00
Un 03	Union	295025	7.73	7.83	7	0.04	0.02	0.00
Un 04	Union	295026	0.4		9	0.02	0.03	0.01
Un 05	Union	295027	28.41		2	0.01	0.01	0.00

Quarterly report for the period ending June 30 2010 ~ 15 ~

Appendix 5B Mining exploration entity quarterly report

Rule 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.

Name of entity

	Monax Mining Limited
	ABN 96 110 336 733 Consolidated statement of cash flows
			30 June 2010
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) ) R & D Rebate GST Other Net Operating Cash Flows			Current quarter $A’000	Year to date (12.months) $A’000
			- (855) - - (171) - 29 - - - (61) -	- (1,486) - - (770) - 68 - - 305 (97) 22
			(1,058)	(1,958)
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) Payments relating to the sale of subsidiary Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)			(15) - - - - - - -	(15) - (4) - - - (6) - -
			(15)	(25)
			(1,073)	(1,983)

• 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)	1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	(1,073)	(1,983)
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 (provide details if material) Payments relating to issue of shares / options Net financing cash flows			590 - - - - (33)	5,953 - - - - (219)
			557	5,734
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			(516) 5,324 -	3,751 1,057 -
			4,808	4,808
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
				118
				-
1.25 Explanation necessaryfor an understandingof the transactions The amount at 1.23 above represents non executive directors’ fees and executive director’s salary (including SGC superannuation) and legal fees paid to a legal firm inj which a director is a partner. The amount at 1.24 above represents costs to be recovered in relation to shared facilities from a related entity. 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 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest Marmota Energy Limited pursuant to the Farm-In and Joint Venture Agreements for EL 4510(formerly EL 3358), EL 3355, EL 3356, EL 3359, EL 3458, EL 3561, EL 3684, EL 3685, EL 3357, EL 3775, EL 3911and EL 4000 has incurred on an accruals basis $144,021 in the quarter ending 30 June 2010. OM (Manganese) Ltd pursuant to the Farm-in and Joint Venture Agreement for EL 3357 has incurred on an accruals basis$111,466 in thequarter ending30 June 2010.		Explanation necessaryfor an understandingof the transactions
		The amount at 1.23 above represents non executive directors’ fees and executive director’s salary (including SGC superannuation) and legal fees paid to a legal firm inj which a director is a partner. The amount at 1.24 above represents costs to be recovered in relation to shared facilities from a related entity.
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	Marmota Energy Limited pursuant to the Farm-In and Joint Venture Agreements for EL 4510(formerly EL 3358), EL 3355, EL 3356, EL 3359, EL 3458, EL 3561, EL 3684, EL 3685, EL 3357, EL 3775, EL 3911and EL 4000 has incurred on an accruals basis $144,021 in the quarter ending 30 June 2010. OM (Manganese) Ltd pursuant to the Farm-in and Joint Venture Agreement for EL 3357 has incurred on an accruals basis$111,466 in thequarter ending30 June 2010.

• 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.

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

Note:

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development	$A’000
	750
	-
Total	750

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) – IPO Trust Account	190	156
	4,615	5,165
	-	-
	3	3
Total: cash at end of quarter(item 1.22)	4,808	5,324

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased.	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	EL 3355 EL 3356 EL 3359 EL 3775 EL 3732 EL 3561	Relinquished Relinquished Relinquished Relinquished Relinquished Relinquished	100% 100% 100% 100% 100% 100%	0% 0% 0% 0% 0% 0%

• See chapter 19 for defined terms.

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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) (cents)	Amount paid up per security (see note 3) (cents)
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	148,053,668	148,053,668
	4	4	$0.15	$0.15
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) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	150,000 215,000 10,000 3,000,000 18,309,654 425,000	Nil Nil Nil Nil 18,309,654 Nil	Exercise Price $0.666 $0.246 $0.0517 $0.10 $0.15 $0.0517	Expiry Date 14/02/2012 18/07/2013 23/12/2013 31/07/2012 30/11/2011 05/03/2015
			Exercise Price	Expiry Date
	4	4	$0.15	30/11/2011
	2,500,000 300,000 150,000	Nil Nil Nil	$0.40 $0.666 $0.246	30/06/2010 14/02/2012 18/07/2013
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 does / ~~does not*~~ (delete one) give a true and fair view of the matters disclosed.

Print name: Virginia Suttell.................................. Date: ....30/07/2010........................ ~~(Director/~~ 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.

== == == == ==

• See chapter 19 for defined terms.

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