GENESIS RESOURCES LIMITED — Interim / Quarterly Report 2011

Oct 30, 2011

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Level 9, 468 St Kilda Road, Melbourne, Victoria, Australia, 3004

Tel: +61 3 9988 5892 Fax: +61 3 9867 4180 www.genesisresourcesltd.com.au

Quarterly Activities Report – September 2011

HIGHLIGHTS

Plavica Au-Ag-Cu Project

• Drilling programme on Plavica was designed to test the current resource and to identify zones of mineralisation previously not drill-tested

• Drilling was completed in August 2011 for a total of 2,842m

• Samples were sent for assay to ALS Chemex in Romania in late August 2011, and the Company is awaiting receipt of analytical results

• Reconnaissance exploration has commenced over other concession areas in the vicinity of the Plavica Project

Gladstone-Mount Millar Mn Project

• Queensland Government has declared an Urban Restricted Area ( URA ) to exclude exploration near Gladstone; the URA includes the Mount Miller Mining Lease Application ( MLA )

• Submission sent to Government requesting the MLA to be exempt from URA

• Diamond drilling programme to define extent of manganese ore remaining below the previously mined ore planned and budgeted but postponed temporarily

• Compensation Agreements and Government permissions nearing completion

• Geological logging, surface mapping and sampling carried out

Pioneer Au Project

• Small amounts of pyrrhotite and magnetite support use of a magnetometer survey if gold associated with these phases

Alice Springs Cu-Au-Fe Project

• Significant grades of copper, gold, silver and bismuth (with visible malachite, chalcopyrite, chalcocite and chrysocolla) found in Cadney Fault shear zone

• Prospects on cross-cutting northeast-striking faults also carry significant mineralisation

McArthur River Mn Project

• Results of detailed gravity survey indicate possibility of buried massive manganese based on gravity contrast with surrounding limestone

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Information in this report that relates to exploration activity and results was compiled under the guidance of Dr A John Parker who is a Member of the Australasian Institute of Geoscientists and by Dr Kerim Sener, who is a member of the Geological Society of London and the Institute of Materials, Minerals and Mining. Dr Parker and Dr Sener are non-executive directors of Genesis Resources Limited and have sufficient experience relevant to the styles of mineralisation and to the activities which are being reported to qualify as Competent Persons as defined by the JORC code, 2004. Dr Parker and Dr Sener consent to the release of the information compiled in this report in the form and context in which it appears.

Quarterly Activities Report July-September 2011

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PLAVICA PROJECT, MACEDONIA

EXPLORATION & DEVELOPMENT PROGRESS DURING THE QUARTER

PLAVICA PROJECT: Gold, Silver and Copper (GES earning 62%)

The Ministry of Economics within the Republic of Macedonia ( FYROM ) has granted 7 concession licences over Plavica Project to Genesis Resources’ JV partner RIK Sileks AD Kratovo ( Sileks ) for a term of 4 years (GES has the right to earn a 62% joint venture interest). The project is made up of 7 exploration licences covering over 184.94 km[2] in the Carpathian Volcanic Arc, a major epithermal province running through Eastern Europe, and is highly prospective for gold, copper and silver mineralisation.

Plavica has an Inferred Mineral Resource (JORC Code-compliant) of:

Element	Million Tonnes	Average Grade	Top Cut	Status	Contained Metal	Contained Metal	Contained Metal
					ounces	kg	Lbs
Gold	57.24	0.9 g/t	5 g/t	Inferred	1,656,198	51,514
Silver		15.3 g/t	50 g/t	Inferred	28,237,764	878,29
Copper		0.282 %	0.9 %	Inferred		16,140,898	32,679,184

During the quarter, the Company completed a drilling programme to test a part of the current Inferred resource and to undertake new exploration drilling along zones of vughy silica alteration in the vicinity of Plavica Peak for a total of 2,842m. A total of thirteen holes were drilled, with four deep holes, totalling 1,319m, drilled in to an area that contains part of the current resource, eight holes drilled in to the exploration target represented by Plavica Ridge and one hole was drilled in to an area containing historic mining activity. The programme has been planned in part to verify and validate an important zone within the current resource and to identify a potential area for resource expansion.

The Company is currently awaiting completion of assays at ALS Chemex in Romania for all 2,842m drilled in the programme. Samples sent to assay were based on half-core 1m sub-samples and composited over 2m intervals. The Company has maintained strict QA/QC procedures for this drilling programme. Such procedures have included the insertion of blanks, standards and pulp/crush duplicates in to the sample sequence for every batch of 22 samples.

Reconnaissance exploration of the remaining 6 concession areas in the vicinity of the Plavica project, commenced with a review of historic datasets and target area definition. Remote-sensing imagery has been used to constrain areas of interest within these concessions and ground based follow-up work will commence during Q4 2011. The aim of this work programme is to define areas that show potential for satellite mineral resources to Plavica and to determine sites for future drilling.

Quarterly Activities Report July-September 2011

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AUSTRALIA

EXPLORATION & DEVELOPMENT PROGRESS DURING THE QUARTER

GLADSTONE-MOUNT MILLER PROJECT: Manganese (GES 100%)

The Gladstone-Mount Millar Project consists of Exploration Licence (EPM15771) and Mining Lease Application (MLA80166) and 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 was 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 from 71% to 75% MnO2.

On 21 April 2011, the Queensland Government Department of Environment and Resource Management granted an Environmental Authority (Mining Lease) Non Code Compliant Level 2 Mining Project (EA MIN201115110) for the Mount Millar Mine. However, this EA is not activated until compensation agreements are in place with Queensland Main Roads and Queensland National Railways. Finalisation of these CAs is imminent.

The Queensland Government recently advised of their commitment to resolve exploration-urban land use conflict by declaring a buffer zone, an Urban Restricted Area (URA), around populated areas where exploration was restricted or refused. The outer reaches of the buffer zone around the Gladstone Township impinge on the Gladstone EPM and include the MLA over Mount Miller, so that Genesis has been asked to justify being exempted from this zone. Our reply has been acknowledged and a reply is awaited.

A detailed proposal and budget for diamond drilling at Mount Miller to confirm the mineralisation believed to remain after previous mining activity was prepared. A drill rig was arranged to begin drilling in November, but the rig is no longer available.

Detailed geological and petrophysical logging of previous diamond drill-holes and surface geological mapping and sampling of exposed manganese mineralisation was carried out.

Permission to conduct the drilling programme was sought under the Gladstone EPM and a response is awaited.

PIONEER PROJECT: Gold (GES 100%)

The Pioneer Project consists of one granted Exploration Permit Mineral (EPM15619) covering 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. The Pioneer Reef was reported to have produced 2,452.75 ton of ore milled for a yield of 57.168 kg of gold, representing an average grade (recovered) of 23.31 g/t gold when mining stopped in the 1940’s.

Since slightly magnetic pyrrhotite was recently found by Genesis geologists in samples from the Main Shaft and some magnetite was noted by previous explorers, a detailed, inexpensive ground magnetic survey is planned.

Genesis is seeking interest of a potential JV partner.

Quarterly Activities Report July-September 2011

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ALICE SPRINGS PROJECT: Copper, Gold, Iron (GES 100%)

The Alice Springs Project consists of one granted Exploration Licence (EL24817) and is located approximately 155 kilometres by road from Alice Springs via the Stuart Highway.

Previous exploration by Genesis and other explorers has identified high grade secondary copper mineralisation over a number of areas up to 30% Cu. The copper appears to be structurally controlled and associated with magnetite enrichment in some areas. The licence has been renewed with a partial reduction to 157 blocks until 17[th] April 2012.

Genesis publically reported in September 2011 positive results for samples collected during a field assessment of geological and geophysical targets.

Significant grades of copper, gold, silver and bismuth (with visible malachite, chalcopyrite, chalcocite and chrysocolla) were identified in the Cadney Fault shear zone. This zone, which consists of quartzcarbonate veins in sheared gneiss, has a strike-length of over 10km in an east-southeast direction across most of the licence area (Figure 1).

Two prospects on this shear zone revealed strong anomalism in Cu, Bi, Ag and Au in recent sampling: Sample number (SN) G00181 (Corner Post Hill) 5.8% Cu, 4.6% Bi, 27 g/t Ag and 0.7g/t Au, which confirmed historical sampling where high Pb (4320ppm) and iron (28%) were also found. SN G00170, taken over a target electrical anomaly, assayed 3390ppm Cu and supported the historical results of 13% Cu and 0.5g/t Au.

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Figure 1: Location of copper-gold anomalies along and adjacent to the Cadney Fault shear zone

Quarterly Activities Report July-September 2011

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Prospects on cross-cutting northeast-striking faults were also found to be carrying significant mineralisation, including iron stringers, with SN G00176 containing 1340ppm Cu and SN G00184 returning 7360ppm Cu and 1.8g/t Au, the latter confirming historical anomalism of 15% Cu and 2.6g/t Au in the area.

Follow-up work will focus on rock-chip and soil sampling on the shear zones, especially points of intersection, prior to drilling.

The best iron grades received were from samples G00172 from Triple Iron Hill and G00176 from “Diana’s Block 8”, which returned 59.3% and 57% Fe respectively. However, sample G00159 taken from Magnetite Hill returned only a moderate assay of 23.9% Fe.

ARTUNGA PROJECT: Gold-Copper (GES 100%)

The Arltunga gold project is located about 110 kilometres northeast of Alice Springs and encompasses most of the former Arltunga Goldfield. The Arltunga Goldfield has been subject to small scale historical mining activities from the late 1800s to mid 1900s, and again in the 1980s, producing approximately 15,400 oz of gold, primarily from high grade quartz reefs. The Exploration License hosts 33 historical gold mines and prospects with significant gold assays up to 53g/t from rock chip sampling around old mine workings and pyritic-quartz veins.

Genesis Resources publically reported in September 2011 positive results for samples collected during a field assessment of geological and geophysical targets.

High values of gold from widespread historical working were confirmed, which indicated that goldpregnant solutions were generated locally, probably in igneous intrusions evident on magnetic images. Although generally associated with thin quartz veins which are of no further interest in themselves, an excellent gold value of 29.2g/t Au (SN G00133) was discovered in chlorite schist which cross-cuts the lines of lode. The possibility of larger scale, shear-hosted gold deposits will be investigated.

Some electrical, gradient-array-induced-polarisation anomalies investigated were found to be associated with pyritic quartz veins. Since a previous investigation found that massive pyrite at Wheal Fortune Mine (Figure 2) contained 134 g/t Au, some electrical anomalies will be further investigated.

Quarterly Activities Report July-September 2011

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Figure 2: Location of copper-gold anomalies in the Arltunga Goldfield

McARTHUR RIVER PROJECT: Manganese (GES 100%)

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, recently acquired drilling information 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.

Quarterly Activities Report July-September 2011

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CORPORATE

At 30 September 2011, the Company had approximately $844,000 cash in hand and 370,266 “CDIs” shares in Thor Mining PLC.

Board and Management

Mr Eddie Pang Chairman Dr Kerim Sener Director (Non-Executive) Dr John Parker Director (Non-Executive) Mr Deric Wee Director (Non-Executive) Ms Sophie Karzis Company Secretary

Securities on Issue

Shares at 30 September 2011 53,080,752 Options outstanding: Exercisable at 30 cents, expiring 24 November 2011 2,500,000

Tenements as at 30 September 2011

Project	Tenement Number	Area (sq km)	Current Holder	State
Alice Springs	EL24817	495.7	Genesis Resources	NT
Arltunga	EL25238	95.2	Genesis Resources	NT
Fenn Gap	EL24839	52.43	Genesis Resources	NT
Laura River	EMP15242	330.7	Genesis Resources	QLD
Pioneer	EPM15619	12.47	Genesis Resources	QLD
McArthur River	EL24814	505.6	Genesis Resources	NT
Gladstone	EPM15771	63.93	Genesis Resources	QLD
Mt Millar MLA	MLA80166	32.24 Ha	Genesis Resources	QLD
Total Australia		1,556.03
Plavica(7 leases)		184.9	RIK SILEKS AD Kratovo	Macedonia
Total		1740.93

Quarterly Activities Report July-September 2011

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About Genesis Resources Limited

Genesis Resources Limited is an Australian company with a portfolio of quality iron, manganese, gold, uranium and base metal (copper-zinc-silver) in the highly prospective Archaean and Proterozoic metallogenic provinces of Australia.

Genesis has signed a Joint Venture over an advanced copper-gold project (Plavica) within the Former Yugoslav Republic of Macedonia. The Plavica Project lies within Carpathian Volcanic Arc, a major epithermal province running through Eastern Europe, which is highly prospective for gold, copper and silver mineralisation.

Genesis projects are close to established infrastructure including railways, shipping ports, highways, power stations and populated areas.

The Company’s objective is to provide rapid capital growth through mineral discoveries and development of economic deposits in Australia and overseas.

For more information please visit the Company website at: www.genesisresourcesltd.com.au

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Location of Genesis Resources Limited’s Australian projects

Quarterly Activities Report July-September 2011

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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, 01/06/10.

Name of entity

Name of entity
Genesis Resources Limited
ABN 22 114 787 469	Quarter ended (“ current quarter” )
22 114 787 469	30 Sept 2011

Consolidated statement of cash flows

	Consolidated statement of cash flows
	Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & 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 (3 months) $A’ 000
		- (582) - - (102) - 8 - 14 -	- (582) - - (102) - 8 - 14
		(662)	(662)

• See chapter 19 for defined terms.

Appendix 5B Page 1

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Appendix 5B Mining exploration entity quarterly report

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)	- - - - 481 - - - -	- - - - 481 - - - -
	481	481
	(181)	(181)
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) Net financing cash flows	- - - - - -	- - - - - -
	-	-
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	(181) 958 -	(1,387) 2,345 -
	777	958

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Payments to directors of the entity and associates of the directors

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

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----- Start of picture text -----

Current quarter
$A'000
Aggregate amount of payments to the parties included in item 1.2 80
-
Aggregate amount of loans to the parties included in item 1.10
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• 1.23 Aggregate amount of payments to the parties included in item 1.2

• 1.24 Aggregate amount of loans to the parties included in item 1.10

• 1.25 Explanation necessary for an understanding of the transactions

None

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

None

• 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

None

• See chapter 19 for defined terms.

Appendix 5B Page 3

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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
	-	-
	-	-

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’ 000
	648
	-
	-
	150
Total	798

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as	Current quarter	Previous quarter
shown in the consolidated statement of cash flows)	$A’ 000	$A’ 000
to the related items in the accounts is as follows.
5.1 Cash on hand and at bank	777	958
5.2 Deposits at call	-	-
5.3 Bank overdraft	-	-
5.4 Other (Term Deposit)	67	67
Total: cash at end of quarter(item 1.22)	844	1,025

• See chapter 19 for defined terms.

Appendix 5B Page 4

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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 of quarter	Interest at end of quarter
	-	-	-	-
	-	-	-

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.

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
7.3 +Ordinary securities	53,080,752	53,080,752

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	-	-
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	Nil
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	500,000 options to ordinary shares purchase(conversi on factor 1 : 1)	500,000	Exercise price 0.2	Expiry date 27/10/2012
	-	-	-	-
	-	-	-	-
	-	-	-	-
7.11 Debentures (totals only)	Nil
7.12 Unsecured notes(totals only)	Nil

• 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 give a true and fair view of the matters disclosed.

Eddie Lung Yiu Pang

Chairman

29 October 2011

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.

Appendix 5B Page 7

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