Future Metals NL — Interim / Quarterly Report 2012

Oct 14, 2012

15 October 2012

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Manager of Company Announcements ASX Limited Level 8 Exchange Plaza 2 The Esplanade PERTH WA 6000

By E‐Lodgement

BOARD & MANAGEMENT Mr Greg Bandy EXECUTIVE DIRECTOR

Mr Jason Bontempo NON‐EXECUTIVE DIRECTOR

Mr Stephen Brockhurst NON‐EXECUTIVE DIRECTOR

Quarterly Report for the Period Ending 30 September 2012

Ms Rebecca Sandford Ms Shannon Robinson JOINT COMPANY SECRETARY

Issued Capital: 266M *** ASX Code: RMP Closing price: A$0.06 AIM Code: *RMP Closing Price: £0.0395* * as at 30 September 2012

The Board of Red Emperor Resources NL ( Red Emperor or the Company ) is pleased to provide the following commentary and Appendix 5B.

Puntland Projects

During the quarter Red Emperor’s JV partner and operator of its Puntland Project, Horn Petroleum Corp (TSXV: HRN), continued to drill the second of two exploration wells in the Dharoor Valley of Puntland, Somalia. Horn conducted an open hole Drill Stem Test over a 50 meter gross interval (between 1,910m – 1,960m) at Shabeel North which contained several sands in the upper portion of the primary Jesomma Formation which had oil shows.

The test recovered fresh water (1200 ppm Cl‐) without any traces of oil. The well continued drilling through the entire Jesomma reservoir section to reach a depth of 2,200 meters. The section contained several additional sands with oil and gas shows and a full set of electrical logs was run to determine if these sands contained potential oil zones that would warrant further testing. The analysis of these logs indicated that the most prospective looking zone in the well was the upper Jesomma sand interval that had already been confirmed by testing to contain fresh water and thus no further testing could be justified.

Based on the positive evidence of oil shows and the presence of good quality reservoir in the Jesomma, the partnership decided to deepen the well in order to evaluate the potential of the Lower Cretaceous and Jurassic sections. During the quarter the Shabeel North well reached a total depth of 3,945 meters and encountered metamorphic basement at a depth of 3,919 meters. The well penetrated 149 meters of interbedded sands and shales of the Triassic Adigrat Formation with no oil or gas shows and only minor porosity exhibited on electric logs. Accordingly, the well was plugged and the rig moved off site.

By contributing its proportionate share of costs to both the Shabeel North well and the previously drilled Shabeel‐1 well, Red Emperor has now earned its 20% interest in the two highly prospective production sharing contracts (“PSCs”) for the Dharoor Valley Exploration Area and the Nugaal Valley Exploration Area.

REGISTERED OFFICE Ground Floor 1 Havelock Street West Perth WA 6005

POSTAL ADDRESS PO Box 1440 West Perth WA 6872

CONTACT DETAILS Tel: +61 8 9488 5220 Fax: +61 8 9324 2400

WEBSITE

www.redemperorresources.com

SHARE REGISTRY Computershare Level 2 45 St Georges Terrace Perth WA 6000 Tel: 1300 555 159

NOMINATED ADVISER & JOINT UK BROKER Fox Davies Capital Limited 1 Tudor Street London EC4Y 0AH Tel: +44 (0) 203 463 5010

JOINT UK BROKER Old Park Lane Capital plc 49 Berkley Square London W1J 5AX Tel: +44 (0) 207 493 8188

ASX CODE | AIM CODE RMP

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Based on the encouragement provided by these two Shabeel wells, the Operator (Horn Petroleum Corporation) and their partners, Range Resources and Red Emperor, has entered into the next exploration period in both the Nugaal and Dharoor Valley Production Sharing Contracts (“PSCs”) which carry a commitment to drill one well on each block within an additional 3 year term. The current operational plan would be to contract a seismic crew to acquire additional data in the Dharoor Valley block and to hold discussions with the Puntland Government to gain access regarding drill ready prospects in the Nugaal Valley block. The focus of the Dharoor seismic program will be to delineate new structural prospects for the upcoming drilling campaign.

Georgia Project

During the quarter the joint venture continued with the revised development strategy in respect of Blocks VIa and VIb of the Georgia Project. The revised strategy will focus on low‐cost, shallow appraisal drilling of the contingent resources around the Tkibuli‐Shaori (“Tkibuli”) coal deposit, which straddles the central sections of the Company’s two blocks.

Tkibuli has been estimated by Advanced Resources International to contain recoverable gas resources of at least 0.4 trillion cubic feet of coal‐bed methane (“CBM”). Sand horizons have also been identified around the coal beds, which could add additional, conventional hydrocarbon resources to those estimated for CBM at Tkibuli alone.

By prioritising exploration around the productive coal seams, the Company has the opportunity to make early discoveries, add proven reserves and look to provide revenue potential from the Tkibuli CBM play within 18 months from commencement of development, in conjunction with satisfying its PSA commitments. Agreements have been signed with the Georgian Industrial Group (“GIG”) who will look at the joint development of the project alongside the current partners as well as taking 100% of the gas produced from the project under the offtake agreement.

During the quarter the joint venture commenced its seismic program which is nearing completion. Processed results should be ready for interpretation by early December 2012.

Corporate

During the quarter the Company completed the issue of 7,500,000 fully paid ordinary shares to raise gross proceeds of A$2.25 million. The funds raised will be used for working capital and to progress the Company’s exploration activities in Puntland and Georgia.

For and on behalf of the Board

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Greg Bandy Executive Director

Ground Floor, 1 Havelock Street, West Perth WA 6005 | Tel: +61 8 9488 5220 | Fax: +61 8 9324 2400 | www.redemperorresources.com ABN 99 124 734 961

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

RED EMPEROR RESOURCES NL

	ABN 99 124 734 961 Consolidated statement of cash flows		Quarter ended (“current quarter”) 30 SEPTEMBER 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			Current quarter $A’000 Year to date $A’000
			‐ ‐ (5,125) (294) (5,125) (294) ‐ ‐ 38 38 ‐ ‐ ‐ ‐ ‐ ‐
Net Operating Cash Flows			(5,381) (5,381)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) investments 1.9 Proceeds from: (a) prospects (b) equity investments (c) investments asset acquisition escrow acc 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Proceeds from underwriting Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)			‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 982 ‐ ‐ 982 ‐ ‐ ‐ ‐ ‐ ‐
			982 982
			(4,399) (4,399)

• See chapter 19 for defined terms.

30/9/2001 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(4,399)	(4,399)
Cash flows related to financing activities 1.14 Proceeds from placement 1.15 Proceeds from option exercise 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Costs associated with issue of shares Net financing cash flows	2,250 ‐ ‐ ‐ (135)	2,250 ‐ ‐ ‐ (135)
	2,115	2,115
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	(2,284) 18,044 ‐	(2,284) 18,044 ‐
	15,760	15,760

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.2 1.2	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
		51
		Nil
1.2	Explanation necessary for an understanding of the transactions
	Payments of Directors Fees and Remuneration	51

Non‐cash financing and investing activities

2.1 2.2	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
	Nil
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest
	Nil

• See chapter 19 for defined terms. Appendix 5B Page 2

30/9/2001

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	‐
Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration			$A’000
			1,000
			‐
			‐
			200
Total			1,200

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 – Term Deposit	15,760	18,044
	‐	‐
	‐	‐
	‐	‐
Total: cash at end of quarter(item 1.22)	15,760	18,044

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
	Nil	None
	Nil	None

• See chapter 19 for defined terms.

30/9/2001 Appendix 5B Page 3

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) (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	Nil
	Nil
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy‐ backs	266,234,221 7,500,000	266,234,221	‐ $0.0001	‐ $0.0001
	7,500,000 Nil	7,500,000	$0.30
7.5 +Convertible debt securities(description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	Nil
	Nil Nil
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	594,324 5,920,000 5,166,565 1,170,000	‐ ‐ ‐ ‐	$0.17 & £0.11 $0.265 & £0.18 £0.305 £0.32
	Nil	‐
	7,500,000	7,500,000	$0.30
	Nil
7.11 Debentures (totals only)	Nil	Nil
7.12 Unsecured notes (totals only)	Nil	Nil

• See chapter 19 for defined terms. Appendix 5B Page 4

30/9/2001

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 give a true and fair view of the matters disclosed.

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GREG BANDY Executive Director

15 October 2012

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.

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• See chapter 19 for defined terms.

30/9/2001 Appendix 5B Page 5