GENESIS RESOURCES LIMITED — Capital/Financing Update 2012

May 13, 2012

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Genesis Resources Limited is an Australian company with a portfolio (over 1,501 km[2] ) of quality iron, manganese, gold and base metal projects in the highly prospective Proterozoic and Palaeozoic metallogenic provinces of Australia.

ASX ANNOUNCEMENT

14 May 2012

• STRATEGIC PLAN UPDATE

• NEW DIRECTOR APPOINTMENTS

Genesis has also signed a Joint Venture over the Plavica Project: an advanced project within Macedonia. The Plavica Project is highly prospective for gold, copper, silver, molybdenum, lead and zinc mineralisation.

Genesis is an exploration company committed to the creation of shareholder value through successful mineral exploration and development.

Registered Office

Level 3, 1 Collins Street, Melbourne VIC 3000 Australia

Tel: +61 3 9665 0411 Fax: +61 3 9650 5571 ABN: 22 114 787 469

• RIGHTS ISSUE & APPLICATION OF FUNDS

• PLAVICA PROJECT

• CLANCY EXPLORATION LIMITED PROPOSED TAKE-OVER

• OTHER COMPANY ASSETS

Strategic Plan Update

In light of recent events and market interest in Genesis Resources Limited ( Genesis or the Company ) the Board is pleased to provide the market with an update of the Company’s forward strategy.

As shareholders will be aware, the Company released a JORC compliant inferred resource estimate in relation to a joint venture (under which the Company has the right to earn a 62% interest) for the project named ”PLAVICA” located in the former Yugoslav Republic of Macedonia ( FYROM ).

Directors and Management

Mr Eddie Pang Chairman Mr Peter Kong Managing Director Dr John Parker Non-Executive Director

The Board believes that the Plavica Project is potentially a world class deposit and an action plan has now been developed in order to advance the Project in a timely manner with the objective of the Company and shareholders’ value to be re-rated accordingly.

Recent action items include-:

Mr Patrick Volpe Non-Executive Director Deric Wee Non-Executive Director Mr John Zee Non-Executive Director

Ms Sophie Karzis Company Secretary

• The appointment of additional experienced members to the Board including a new Managing Director.

• Fund-raising successfully completed.

• A new review of current resource to include gold equivalents for copper and silver resources.

• The preparation of new inferred resource calculation based on several (a lower and upper range) cut offs to be applied to the resource.

ASX Code: GES Issued Capital: 79,621,128 shares

GENESIS RESOURCES LIMITED ACN 114 787 469 Level 3, 1 Collins Street, Melbourne, Victoria 3000, Australia Tel: +61 3 9665 0411 | Fax: +61 3 9650 5571 | www.genesisresourcesltd.com.au

• Steps in train to commence a scoping study, EIA (environmental impact study) and BFS (bankable feasibility study) with the objective of obtaining a BFS as soon as possible.

• Independent expert to be appointed to determine value of GES exploration and resource portfolio and in particular the Plavica Project.

New Board Members

As announced to the market earlier today, the Board welcomes the appointment of three additional directors, Mr Peter Kong ( Managing Director ), Mr Patrick Volpe ( Non-executive Director ) and Mr John Zee ( Non-executive Director ).

The skills and experience that is contributed to the Board by the appointment of three new directors will ensure the Company is well positioned to execute the Company’s forward strategy plans.

Successful Completion of Non-Renounceable Rights Issue

The Company successfully raised $1.19 million from its recent rights issue that was fully underwritten. Consistent with previous announcements, the Company intends to use the funds raised to commence the following activities:

1. Internal Review and Independent Expert’s Report

The Company proposes to apply the majority of funds raised from the recent rights issue to advance its gold, copper and silver deposit known as the Plavica Project located in the FYROM.

A resource statement released to the ASX on 28 March 2012 reported a JORC Inferred Resource of 1.86 million ounces of gold (55.5 million tonnes averaging 1.0 g/t Au based on a 0.75 g/t Au cut off). This resource did not take into account the gold equivalents of the copper and silver resources. The Board is now reviewing this resource calculation with a view to advising on:

• Gold equivalents for copper and silver.

• Prepare a “cut off” resource table based on lower and higher cut off parameters.

Shareholders will be advised when this internal study is complete. The procurement of an Independent Expert’s Report will further support this internal review. In this matter, the Board will appoint an independent expert to determine the value of the Company’s portfolio of resource assets and will advise shareholders accordingly.

2. Plavica Project Scoping Study

The Board will move immediately to tender and select an experienced consulting firm to complete a scoping study of the Plavica Project so as to assist management in the planning of the next stages of exploration and evaluation of the Plavica Project. The objectives of the scoping study will be to:

• determine the conceptual net present value and internal rates of return of the Project;

• determine the drilling required to advance the resource to an indicated and/or mining status for the BFS;

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• determine with confidence the mineralogy and metallurgical makeup of the deposit for metals recovery and mining processing;

• review infrastructure requirements and engineering modules for mining designs and processing;

• determine estimates of operating and capital costs for a mining model, including the scale and type of mining operation (e.g. open pit or underground) to support a potential export market;

• determine indicative costs of production in accordance with regional industry standards;

• carry out an environmental impact assessment study (EIS) to ensure compliance with local requirements; and

• do all things necessary to advance the Plavica Project to BFS.

The Scoping Study will assist the Board and management to plan and schedule ongoing programs to further advance the Project and allow the Board to commence discussions with interested parties and potential partners or investors.

The Board intends to appoint an appropriately qualified consultant to prepare an initial scoping assessment for an EIS in accordance with the requirements of the FYROM.

3. Management / Operations

The Board proposes to establish a subsidiary company in Macedonia which will be used as the operating vehicle for the Plavica Project.

In addition, there are plans to expand the exploration team to include not only international exploration and mining experts but also to provide local employment that will form part of our management team.

4. Gladstone-Mount Miller Project (Manganese)

The Gladstone-Mount Miller Project is located approximately 15 kilometres by road from the port of Gladstone on the east coast of central Queensland. The largest mine on the tenements controlled by Genesis is at Mount Miller. The mine opened in 1895 and operated intermittently until 1916 and then from 1958 to 1960. A total of 21,785 tonnes of ore was mined with a grade which ranged up to 75% MnO2. A diamond drilling program has been planned at Mount Miller to establish the depth and strike extent of mineralisation believed to remain after previous mining activity and will be undertaken pending the outcome of certain governmental planning exemption applications.

Further Funding

The Board’s objective will be to move the Plavica Project to a Bankable Feasibility Study as soon as it can.

The Company will require additional funds in the future to undertake a BFS and advance the Plavica Project deposit to an operational mine.

Other Company Assets

It is also the Company’s intention to fund further exploration activities on a number of other key assets, including:

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1. Pioneer Project (Gold)

The Pioneer Project covers 12.47 square kilometres approximately 70 kilometres by road from Bundaberg via the Bruce Highway in Queensland. The project lies within the Gaeta Goldfield and has undergone previous exploration for gold, uranium and base metals, with numerous historical gold workings located throughout the area. Historical mining was primarily focused on the Pioneer Reef which was the largest producer, but mining activities also included several other reefs including Gympie, Lord Nelson, West Yorkshire and Happy Jack. Samples of vein quartz, volcanic and altered host rocks have been analysed to test for the association of gold with magnetite, pyrite, pyrrhotite and arsenopyrite. Results indicate that gold is associated with pyrrhotite, pyrite and arsenopyrite.

A petrological study on two samples from the Main Shaft on Pioneer Reef showed that sulphide-rich granitoid with sericite-clay alteration contains pyrite and arsenopyrite, and therefore the size potential of the Pioneer reef gold mineralised systems may be enhanced beyond the narrow veins. Further exploratory work is required and intended.

2. Alice Springs and Arltunga Projects (Copper, Gold, Iron)

The Alice Springs and Arltunga Projects are located approximately 110-155 kilometres northeast from Alice Springs in the Northern Territory. Previous exploration by Genesis and other explorers has identified high grade secondary copper mineralisation over a number of areas up to 30% copper with associated gold, silver and bismuth (with visible malachite, chalcopyrite, chalcocite and chrysocola). The Arltunga gold project encompasses most of the historic Arltunga gold field. Management plans have been prepared and submitted to the Northern Territory Government for approval to drill, and negotiations are in progress in regard to Aboriginal heritage.

3. McArthur River Manganese Project

The McArthur River project is located approximately 850 kilometres southeast of Darwin in the Northern Territory and 450 kilometres north-west of Mount Isa in Queensland. The project area contains the Masterton No2 manganese occurrence. Previous reviews of the available geophysical and geological data and subsequent reconnaissance rock chip sampling confirmed the location and tenor of the manganese mineralisation. However, historic drilling information acquired in mid-2011 revealed that the main massive occurrences of manganese did not extend below about 5m in depth.

Results of a detailed gravity survey undertaken over a small surrounding area indicate the possibility of buried massive manganese. Petrophysical data has highlighted a gravity contrast between outcropping manganese mineralisation and surrounding limestone and will be used to model the gravity targets for further investigation. Unexplained gravity anomalies offer potential for the discovery of new manganese deposits.

The Company is seeking a joint venture partner for this project.

Moving Forward

The Company’s Directors are looking forward to the results from the implementation of the strategic plan outlined above, and look forward to reporting to shareholders on developments in relation to the Company’s exploration portfolio as further works are undertaken to progress these projects.

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The Board remains committed to monetising the value of the Plavica Project and the other key Company assets for the benefit of shareholders as soon as reasonably possible.

The Board now strengthened with the addition of a Managing Director and two new Non-executive Directors, intends to focus on strategic plans and initiatives to ultimately enhance shareholder value which in the Board’s view is not presently reflected in the Company’s current market capitalisation.

CLY Takeover Bid

On 3 April 2012, in response to the off-market takeover bid announcement by Clancy Exploration Limited (ASX:CLY), the Directors’ recommended that shareholders ‘ take no action’ . At this stage, the Directors’ reiterate this recommendation.

Once the Independent Expert’s Report referred to in this announcement has been finalised and/or the receipt of a bidder’s statement from CLY, the Directors’ will update shareholders regarding their recommendation in relation to the CLY takeover bid.

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For further information, please contact:

Eddie Pang

Chairman Tel: +61 3 9867 3723 info@genesisresourcesltd.com.au

Information in this report that relates to exploration activity, mineral resources and results was compiled by Dr A John Parker who is a Member of the Australasian Institute of Geoscientists. Dr Parker is a non-executive director of Genesis Resources Limited and has sufficient experience relevant to the styles of mineralisation and to the activities which are being reported to qualify as a Competent Person as defined by the JORC code, 2004. Dr Parker consents to the release of the information compiled in this report in the form and context in which it appears.

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