GENESIS RESOURCES LIMITED — Interim / Quarterly Report 2012

Oct 30, 2012

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GE NE SIS RE S OUR CES LIM ITED  Level 3  1 Collins Street  Melbourne  VIC 3000 T +61 3 9286 7500  F +61 3 9662 1472  www.genesisresourcesltd.com.au  ABN 22 114 787 469

Quarterly Activities Report – September 2012

HIGHLIGHTS

Plavica Au-Ag-Cu Project

• World renowned Resource consultancy company, Golder Associates, was contracted to complete a scoping study and to assist in progress towards a final feasibility study at Plavica Au-Cu-Ag deposit in eastern Macedonia.

• A Turkish drilling company is ready to commence a program of 7500m RC and 2500m of diamond drilling. See Figure 3 for the planned drill-hole layout. Drilling should commence by November 2012.

• Enriched oxide gold is targeted by the planned RC drill-holes.

• Diamond drilling will add reliability to the known resource by:

• closing the drill-hole spacing,

• testing the validity of the historical database,

• examining the distribution of different geological controls on mineralisation,

• measuring specific gravity of the geological units for input into the tonnage calculations, and

• o increasing knowledge of geological continuity.

Gladstone-Mount Miller Mn Project

• Mount Miller Mining Lease (EA MIN201115110): Agreement was reached with both Queensland Main Roads and Queensland National Railways, such that the Mining Lease can be progressed when parties have signed the documents.

• The company still awaits the granting of an exemption from Urban Restricted zoning around Gladstone before carrying out the planned diamond drilling program at Mount Miller.

Alice Springs Au Project

• 375 soil samples were taken from the Cadney Fault zone.

• Results are awaited.

Information in this report that relates to exploration activity and results was compiled under the guidance of John Howard who is a Member of the Australasian Institute of Geoscientists. Mr Howard 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. Mr Howard consents to the release of the information compiled in this report in the form and context in which it appears.

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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 the joint venture partner of Genesis Resources Limited ( Genesis or the Company ), RIK Sileks AD Kratovo ( Sileks ), for a term of 4 years to April 2014 (Genesis has the right to earn a 62% joint venture interest). The project is made up of 7 exploration licences, as shown on Figure 2, which cover over 184.94 sq km in the Carpathian Volcanic Arc, a major epithermal province running through Eastern Europe, and is highly prospective for gold, copper and silver, lead and zinc mineralisation.

The project was the site of mining activity in Roman times and then again during the 1930s, reputedly of high grade gold. Over eighty, mostly vertical diamond drill-holes by the Government of the Macedonian Republic of Yugoslavia searching for porphyry copper mineralisation, and 10 angled diamond drill-holes by Rio Tinto and European Minerals searching for gold mineralisation, was augmented by Genesis during 2011 with 12 diamond drill-holes. A significant gold-copper-silver resource was defined.

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Figure 2 Location of Macedonian Genesis properties

CURRENT WORK PROGRAM

Golder Associates were recently appointed to carry out a detailed scoping study and to advise on the steps necessary to progress from the previously announced Inferred Resource to a JORC compliant Indicated Resource status and Final Feasibility Study.

Their work began with a reconnaissance survey of the environment and local population centers possibly affected by the planned mining development. Baseline studies will follow. Preliminary metallurgical and mining studies are underway and a technical assessment of the Inferred Resource is also progressing.

Genesis Resources Limited | Quarterly Activities Report | July 2012 – September 2012

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The Genesis Resources International work program, which is about to begin, will address the geological and geochemical aspects of this scoping study through the acquisition of extra technical and drill-hole information. It will focus on the area of historical drill-holes shown on Figure 1, which formed the basis of the previously announced Inferred Resource.

Visa applications for the drilling crew and subsequent customs clearance for the rigs have delayed the commencement of the drilling program until now. However, although the climatic conditions are threatening at this time of year, Genesis Resources has decided to go ahead with this program in the hope of receiving encouraging results. Drilling will commence during November.

Spektra Joetek Drilling Company of Turkey have been contracted to carry out 7500m of RC and 2500m of diamond drilling to maximum depths of 250m and 400m, respectively.

Diamond drilling

The accompanying Figures 3 and 4 show the location of a planned cross-section of ‘scissored’ diamond drill-holes on a geological base. The purpose of this scissor profile is to examine:

• geostatistically the validity of the historical drill hole data-base by comparing it with a new set of carefully controlled geochemical and geological data,

• the different styles, distribution and orientation of mineralisation in order to more accurately estimate the gold content of the Resource (e.g. styles include: vuggy silica, vein-style sulphide, disseminated pyrite-gold mineralisation, and stock-work veinlets in the primary and oxide zones), and

• the continuity of geological domains for estimating mineral endowment.

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Figure 3 Plavica drilling plan

Genesis Resources Limited | Quarterly Activities Report | July 2012 – September 2012

Page 3

Reverse Circulation drilling

The accompanying Figure 3 also shows the general location of planned RC drill-hole collars. The purpose of these holes is to test:

• the presence of a postulated oxide gold enrichment zone extending east-west through the target area. The enhanced gold occurrence may be associated with stock-work, disseminations or sulphide veins. The historical gold ore, which was stoped by British Selection Trust beneath pits dug by the Romans, is thought to be an example of the style of mineralisation sought.

• the presence of oxide gold enrichment in the southwest on Figure 3, and

• the mineral endowment on a closer drill-hole spacing.

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Figure 4 Plavica diamond drill-hole section

Other

Many measurements of specific gravity will be taken from different geological domains in order to refine the total estimated tonnage figures of the resource. Unfortunately, access to the equipment is delayed by customs procedures.

Genesis Resources Limited | Quarterly Activities Report | July 2012 – September 2012

Page 4

A hand-held spectral instrument will be used to record the distribution of different types of alteration and their relationships with mineralisation. Unfortunately, access to the equipment is delayed by customs procedures.

Historical diamond drill-hole material is being relocated from an old dilapidated core storage facility to a shed which is in very good condition. This work will enable ready access to a library of core consisting of more than 100 drill-holes. Some of these will be re-assayed and others will be relogged using modern lithological parameters and spectral instruments which examine the alteration mineralogy.

Genesis Resources International Dooel, Skopje, a wholly-owned subsidiary of Genesis Resources Ltd was established to carry out the work in Macedonia. Three Macedonian-speaking geologists were employed to assist in the forthcoming drilling program.

AUSTRALIA

EXPLORATION & DEVELOPMENT PROGRESS DURING THE QUARTER

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

The Gladstone-Mount Miller 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 (Figure 1).

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 Miller Mine. The required compensation agreement with Queensland National Railways is now ready to be signed, whilst the agreement with Queensland Main Roads is already signed. The Board will decide whether to activate the Agreements rather than continuing to wait until the Queensland Government provides clarification of the Urban Restricted zone around the Gladstone Township; this will allow the application for the Mineral Lease over the Mt Miller Mine will to progress. However, clarification will still be sought before commencing the drilling program.

The previously reported planned diamond drilling program at Mount Miller was postponed again, pending the outcome of the application for an Urban Restricted zone exemption. It is noted that the wet season will begin in November, making access to the site for a drill rig unlikely this year. In the meantime a magnetometer survey will be carried out over the Mt Miller deposit, in the hope of discovering subsurface extensions to the known mineralisation.

Statutory reporting was carried out and the Licence Renewal is pending.

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 (Figure 1).

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.

No work was done. Annual Technical Report submitted and the Licence was renewed until 1.8.14.

Genesis Resources Limited | Quarterly Activities Report | July 2012 – September 2012

Page 5

ALICE SPRINGS and ARLTUNGA PROJECTS: Copper, Gold, Iron (GES 100%)

The Alice Springs and Arltunga Projects consist of two Exploration Licences, EL24817 and EL25238 respectively, located approximately 110-155 kilometres northeast from Alice Springs in the Northern Territory (Figure 1).

A soil sampling program was carried out over the Alice Springs EL from quad-bikes. The 375 samples from the Caney Fault Zone were sent to Genalysis for partial digestion and analysis. Assays resulting from the process are awaited.

An Authority Certificate was obtained from the Aboriginal Areas Protection Authority for clearance until June 2014 and the Mine Management Plan has been put on hold until the Company’s decision to proceed.

A partial reduction was submitted for Alice Springs and the Licence Renewal is pending.

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 (Figure 1).

The project area contains the Masterton No2 manganese occurrence.

No work was undertaken during the period.

An application for a partial reduction was submitted and the Licence Renewal is pending.

LAURA RIVER Au-Pt PROJECT: (EMP15242)

No work was carried out. Annual Technical Report submitted and the Licence Renewal is pending.

FENN GAP Mn-Fe PROJECT: (EMP24839)

No work was carried out.

CORPORATE

Takeover Bid

In April 2012, Clancy Exploration Limited ( Clancy ) announced a conditional takeover offer to acquire all the shares in the Company ( Clancy Offer ). Under the unsolicited Clancy Offer, Clancy offered to Genesis shareholders 3 Clancy shares for every 1 Genesis share.

The Genesis Board reviewed the Clancy Offer, and commissioned an independent expert which concluded that the Clancy Offer was neither fair nor reasonable to Genesis shareholders. Accordingly, the Board unanimously recommended that all Genesis shareholders reject the Clancy Offer.

On 20 July 2012, Clancy extended the Clancy Offer period for a second time until 20 August 2012, and declared the offer final and unconditional. The Clancy Offer closed on 20 August 2012 with the result that Clancy acquired approximately 8.92% of Genesis’ share capital.

Director Appointment and Resignation

On 27 July 2012, Dr Allan John Parker resigned as Non-Executive Director of the Company to focus on ongoing and increasing commitments.

Genesis Resources Limited | Quarterly Activities Report | July 2012 – September 2012

Page 6

Subsequent to the end of the quarter ended 30 September 2012, on 22 October 2012, the Company appointed Mr John Karajas as Non-Executive Director of the Company. Mr Karajas is a geologist with over 40 years’ experience in mineral and hydrocarbon exploration. The Board anticipates that Mr Karajas, who is fluent in Macedonian and English, will be of key contribution to the Company as it seeks to progress its Plavica Project in Macedonia to the next level.

Capital Raising – Private Placement of Shares

On 9 August 2012, the Company completed the issue and allotment of 11,863,548 shares to a strategic sophisticated investor based in Malaysia, S Active Holding Sdn Bhd ( Placement ) at an issue price of $0.12 per share. The Company raised $1,423,625 under the Placement, with the objective of using such funds to progress the Company’s ongoing exploration activities associated with its Plavica Project in Macedonia.

Capital Raising – Rights Issue

On 27 August 2012, the Company announced a pro-rata non-renounceable rights issue offer on a 1-for-3 basis at an issue price of 9 cents per share to raise approximately $2.5 million ( Offer ). The Offer was fully underwritten by Tigermoth Investments Limited (the Underwriter ).

The Offer closed on 24 September 2012, with a shortfall of 23,278,918 shares ( Shortfall Shares ).

Subsequent to the end of the quarter ended 30 September 2012, on 2 October 2012, the Company issued and allotted to shareholders who took up their entitlements under the Offer a total of 5,001,754 shares.

On 15 October 2012, the Company announced that it had received notification from the Underwriter that the Shortfall Shares had been fully placed.

The Company expects to issue and allot the Shortfall Shares shortly.

Securities on Issue as at 30 September 2012

Fully paid ordinary shares

ITEM	NO. OF SECURITIES
Total fully paid ordinary shares on issue	91,484,676
Total options to acquire fully paid ordinary shares on issue	27,040,376
Unlisted options exercisable at $0.20 on or before 27 October 2012	500,000
Unlisted options exercisable at $0.10 on or before 4 May2014	19,429,424
Unlisted options exercisable at $0.10 on or before 11 May 2014	7,110,952

*Note: this table reflects the Company’s securities on issue as at 30 September 2012 and accordingly does not take into account any shares issued under the Offer.

Board and Management as at 30 September 2012

Genesis Resources Limited | Quarterly Activities Report | July 2012 – September 2012

Page 7

Mr Eddie Pang Chairman 6 March 2009 – present Mr Peter Kong Managing Director 11 May 2012 – present Mr Patrick Volpe Non-Executive Director 11 May 2012 – present Mr Deric Wee Non-Executive Director 11 December 2009 – present Mr John Zee Non-Executive Director 11 May 2012 – present Ms Sophie Karzis Company Secretary 1 December 2010 – present

Tenements as at 30 September 2012

Project	Tenement Number	Area(sq km)	Current Holder	State
Alice Springs	EL24817	372.59	Genesis Resources	NT
Arltunga	EL25238	95.2	Genesis Resources	NT
Fenn Gap	EL24839	52.43	Genesis Resources	NT
Laura River	EMP15242	165.35	Genesis Resources	QLD
Pioneer	EPM15619	12.47	Genesis Resources	QLD
McArthur River	EL24814	380.88	Genesis Resources	NT
Gladstone	EPM15771	63.93	Genesis Resources	QLD
Mt Miller MLA	MLA80166	32.24 Ha	Genesis Resources	QLD
Total Australia		1,422.92
Plavica(7 leases)		184.9	RIK Sileks AD Kratovo	Macedonia
TOTAL		1,607.82

Genesis Resources Limited | Quarterly Activities Report | July 2012 – September 2012

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About Genesis Resources Limited

Genesis Resources Limited is an Australian company with a portfolio of quality gold, iron, manganese, uranium and base metal (copper-zinc-silver) in the highly prospective Proterozoic and Phanerozoic metallogenic provinces of northern and central 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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Figure 1 Location of Genesis Resources Limited’s Australian projects

Genesis Resources Limited | Quarterly Activities Report | July 2012 – September 2012

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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 September 2012

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
	- (227) - - (420) - 5 - 13 -	- (227) - - (420) - 5 - 13
	(629)	(629)
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 (carriedforward)	- - (2) - - - - - -	- - (2) - - - - - -
	(2)	(2)
	(631)	(631)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc.	1,424	1,424

• See chapter 19 for defined terms.

Appendix 5B Page 1

30/9/2001

Appendix 5B Mining exploration entity quarterly report

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) - equity transaction cost Net financing cash flows	- - - - (71)	- - - - (71)
	1,353	1,353
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	722 751 -	722 751 -
	1,473	1,473

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

Current quarter $A'000 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

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
	-	-
	-	-

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	2,329
	-
	-
	408
Total	2,737

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) to	$A’000	$A’000
therelateditemsinthe accountsis asfollows.
5.1 Cash on hand and at bank	1,473	751
5.2 Deposits at call	-	-
5.3 Bank overdraft	-	-
5.4 Other (Term Deposit – bank guarantee)	78	78
Total: cash at end of quarter(item 1.22)	1,551	829

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)	Nil

• See chapter 19 for defined terms.

Appendix 5B Page 3

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Appendix 5B Mining exploration entity quarterly report

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 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	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	91,484,676	91,484,676
		11,863,548	11,863,548	12 cents	12 cents
	7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	Nil
		500,000 options to acquire ordinary shares (conversion factor 1 :1) (these expired after the quarter on 27/10/2012)	Nil	Exercise price 20 cents
		19,429,424 options (expiring 4/5/2014) to acquire ordinary shares (conversion factor 1 : 1) 7,110,952 options (expiring 11/5/2014) to acquire ordinary shares (conversion factor 1 : 1)		Exercise price 10 cents Exercise price 10 cents
		-	-	-	-
		-	-	-	-
7.11 Debentures (totals only)		Nil

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

7.12 Unsecured notes Nil (totals only)

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.

• 3

Peter Kong

Managing Director

31 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.

== == == == ==

• See chapter 19 for defined terms.

Appendix 5B Page 5

30/9/2001