GENESIS RESOURCES LIMITED — Interim / Quarterly Report 2011

Jul 31, 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 – June 2011

HIGHLIGHTS

Plavica Au-Ag-Cu Project

• Drilling programme on Plavica extended beyond the planned 2,500m – drilling has been designed to test the current resource and to identify zones of mineralisation previously not drilltested

• Drilling is expected to be completed in July 2011 for up to 3,000m

• Samples to be sent for assay on conclusion of the drilling programme

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

Gladstone-Mount Millar Mn Project

• Environmental Permit for mining lease over Mt Millar granted

• Scoping study undertaken to examine potential mining options

• Historical estimates of remaining manganese ore support an open cut pit at Mt Millar

• Diamond drilling is recommended to determine reserves

• If drilling indicates ore at deeper levels than historical data, then an underground mine could be more economic.

Pioneer Au Project

• Field reconnaissance undertaken to plan future work program

• No work is planned by Genesis and a JV partner is sought

Alice Springs Cu-Au-Fe Project

• Drilling program management plan lodged with NT Government for approval

• Field mapping and reconnaissance undertaken to re-assess targets

McArthur River Mn Project

• Field mapping and reconnaissance sampling undertaken with assay results awaited

• Prospectivity being reassessed in light of historical drilling information

Arltunga Au-Cu-Fe Project

• Drilling program management plan lodged with NT Government for approval

• Field mapping and reconnaissance undertaken to re-assess targets

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Information in this report that relates to exploration activity and results was compiled by 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 April-June 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
					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 commenced a 2,500m 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. A total of 11 diamond core drill holes were planned to systematically test these areas. 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.

Towards the end of the quarter, and based on visual assessments of mineralization observed in the recovered drill core, the Company determined to increase the budget for the drilling programme for up to a further 500m. The extended drilling programme is presently underway and will include at least one further hole along a vughy silica ridge near Plavica Peak and a exploration hole designed to test an area of extensive old workings to the west of the current resource.

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 the coming quarter. 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.

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.

Quarterly Activities Report April-June 2011

Page 3

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.

A site visit was made by John Parker, John Howard and John Eddington to the Mt Millar Manganese Mine and an assessment of previous drilling programs concluded that manganese ore remaining in the old workings has not been adequately tested.

Significant high grade manganese ore with the possibility of additional low grade material remains in the old mine, particularly at the lower levels. The current ore estimate, based on available historical, unverified data, suggests about 155,000 tonnes of high and low grade manganese at an average of 48.5% MnO2 remains. Using this estimate, Golder Associates carried out a mining and economic “scoping” assessment and found that this target size, if proven, would be economically viable if mined in an open pit.

It was recommended to begin planning a diamond drilling programme to establish a mining reserve. If this drilling confirmed the estimated manganese and additional tonnage at greater depth, then the underground mining option would be re-evaluated.

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.

A field visit by John Parker, John Howard and John Eddington examined the entire line of historical gold workings. GAIP electrical anomalies recommended for follow-up were inspected. Most were associated with metal pipes and ladders etc which explained the anomalies.

One line of IP dipole-dipole data revealed an anomaly at depth which coincides with the line of gold-lode. This anomaly warrants further work. However, the tonnage potential at shallow depth is not considered encouraging.

Genesis is seeking interest of a potential JV partner.

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.

Quarterly Activities Report April-June 2011

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The licence has been renewed with a partial reduction to 157 blocks until 17[th] April 2012.

VTEM and aeromagnetic survey anomalies were ground checked and sampled. Thirty rock chip samples were sent for analysis; results are pending. Magnetometer traverses totalling 3.72 line km were acquired over several anomalies.

A Central Land Council sacred site clearance certificate has been applied for and a Mine Management Plan (Exploration) has been lodged; approvals are awaited.

Site access for drilling is extremely difficult.

McARTHUR RIVER PROJECT: Manganese (GES 100%)

The McArthur River project is located approximately 850 kilometres south east of Darwin in the Northern Territory and 450 kilometres north-west of Mount Isa in Queensland.

The project area contains the Masterton No. 2 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, appropriately placed historic drill holes have demonstrated no manganese extended below about 5m in depth at the main massive occurrences of manganese mineralisation. Some scissor drilling was done to test possible dips in either direction with no manganese intersected.

The best VTEM anomalies were visited on the ground including Anomaly 9. An occurrence of manganese crops out near to this anomaly, suggesting the possibility of manganese associated with this EM feature.

To cover the possibility of massive manganese concentrations at depth below Anomaly 9 and in the vicinity of the Masterton outcrops, a small gravity survey was commissioned.

A Mine Management Plan (Exploration) has been sent to the Government from whom a response is awaited.

Contact was also made with the Northern Land Council who advised that the Heritage Register should be searched, but that there was no Native Title awarded.

Good personal relationships were established with the pastoralists at Calvert Hills Station.

Should the gravity anomaly give some encouragement, then a drilling programme will be planned.

ARTUNGA PROJECT: Gold-Copper (GES 100%)

The Arltunga gold project is located some 110 kilometres northeast of Alice Springs and encompasses most of the Arltunga gold field. 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.

Anomalies in the GAIP survey were field checked geologically and for access.

All old workings visited were dug on very thin (5-15mm), N-S striking quartz veins. Host rocks in proximity to the thin veins were sampled and 35 rock chips being collected and sent for analysis. These results are awaited. Larger E-W striking quartz veins contained no gold mineralisation.

GAIP anomalies are being assessed for drill hole targets in the light of the field observations. Larger fault structures will be investigated for gold potential.

Quarterly Activities Report April-June 2011

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Renewal of the licence was granted with no reduction.

A Central Land Council sacred site clearance certificate has been applied for with approval pending and a Mine Management Plan (exploration) prepared and sent to NT Dept of Resources for a possible drilling programme.

CORPORATE

At 30 June 2011, the Company had approximately $0.96 million cash in hand and 1,545,269 shares in Western Desert Resources Limited.

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

Tenements as at 30 June 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 April-June 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 April-June 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

Genesis Resources Limited

ABN 22 114 787 469	Quarter ended (“ current quarter” )
22 114 787 469	30 June 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 (12 months) $A’ 000
		- (512) - - (236) - 15 - - -	- (1,044) - - (884) - 79 - - 109
		(733)	(1,740)

• 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)	- - - - 198 - - - -	- - - - 353 - - - -
	(535)	(1,387)
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	(535) 1,493 -	(1,387) 2,345 -
	958	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

• 1.23 Aggregate amount of payments to the parties included in item 1.2

Current quarter $A'000 64

• 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.

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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
	429
	-
	-
	150
Total	579

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)	958	1,493
	-	-
	-	-
	67	67
Total: cash at end of quarter(item 1.22)	1,025	1,560

• 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 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 /does not* (delete one) give a true and fair view of the matters disclosed.

Eddie Lung Yiu Pang

Chairman 29 July 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.

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