GREENVALE ENERGY LTD — Capital/Financing Update 2011

Jul 19, 2011

ESPERANCE MINERALS LIMITED (ASX: ESM) – ASX RELEASE

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UPDATE - CONSOLIDATION OF OIL SHALE INTERESTS

20 July 2011

On June 22 Esperance Minerals Limited (ASX: ESM ) and Greenvale Mining NL (ASX: GRV ), announced that they had entered into a heads of agreement to consolidate the ownership of their Oil Shale Projects into GRV.

Under the agreement ESM has agreed to sell its interests in the Nagoorin, Lowmead and Alpha Projects to GRV in return for approximately 28 million GRV shares. The transaction was partially subject to the pre-emptive rights of minority joint venture partner Queensland Energy Resources (QER) the operator of the Rundle and Stuart oil shale projects.

QER has formally notified ESM that it intends to exercise in full its pro-rata pre-emptive on both the Nagoorin and Lowmead projects. This will see ESM receive approximately $1.6 million in cash from QER and 17.5 million fully paid ordinary GRV shares from GRV.

The receipt the $1.6 million cash from QER will increase ESM’s cash reserves to in excess of $2.7 million. The 17.5 million GRV shares, and ESM’s existing holding of 3.6M GRV shares, will be distributed to in species to ESM shareholders by way of a capital return with each ESM shareholder to receive approximately 1 GRV share for every 4 ESM shares held [(#1)] .

A more detailed breakdown of the transaction, which will be subject to approval by both ESM and GRV shareholders, is given over the page. The Company is well advanced in the preparation of a Notice of Meeting to be despatched to shareholders shortly. Further details of the transaction will be outlined in that notice of meeting.

• (#1) Based on the assumption (#1) and that none of the unlisted $0.05 options in ESM are converted which would reduce the distribution on a pro-rata basis.

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Level 6, 50 Clarence Street, Sydney, NSW, 2000 AUSTRALIA Telephone: +61 2 9299 9580 Postal Address: PO Box 4492, Sydney, NSW, 2000 Facsimile: +61 2 9299 9501 Email: info@esperanceminerals.com www.esperanceminerals.com

Detailed Transaction Description

The Esperance Minerals Limited (ESM), Greenvale Mining NL ( GRV ) and Queensland Energy Resources ( QER ) currently hold participating interests in the Lowmead Joint Venture, Nagoorin Joint Venture and Alpha Joint Venture as set out in the table below.

Table 1 – Oil Shale Projects Participating Interests

	CURRENT	CURRENT	CURRENT
Tenement	Joint Venture Participating Interest
	ESM	GRV	QER
Lowmead (MDL 188)	50%	25%	25%
Nagoorin (MDL 234) – in application (EPM 7721)	25%	50%	25%
Alpha (MDL 330)*	50%	50%	0%

*The interest in the Alpha joint venture is held by a joint venture company, Alpha Resources Pty Ltd.

On June 20 2011 the Company signed a conditional heads of agreement with ESM ( Heads of Agreement ) whereby the Company has agreed to acquire from ESM:

a) its participating interest in each of the Lowmead and Nagoorin Joint Ventures and; b) 19,999 shares the Company holds in Alpha Resources Pty Ltd, the holder of MDL 330, (together, the Assets ).

The consideration under the Agreement will be a minimum of 17,491,764 fully paid ordinary shares in GRV and a maximum of 28,092,588 fully paid ordinary shares in GRV ( GRV Shares ). The disposal of interests in the Nagoorin and Lowmead joint ventures is subject to pre-emptive rights in favour of the remaining parties.

The final consideration payable by GRV is dependent on whether QER, as the remaining joint venture party, elects to exercise any of its pre-emptive rights under the Lowmead and Nagoorin joint venture agreements.

As at the date of this announcement QER has formally indicated its intention to exercise it preemptive rights in full. This will result ESM receiving approximately $1.6m in cash from QER and 17.5m GRV shares which would be distributed in species on the basis of approximately 1 GRV share for every 4 ESM shares held [(#2)] .

(#2) Assumes QER exercises its pre-emptive rights in full and ESM receives 17,491,764 fully paid ordinary shares in GRV and that none of the unlisted $0.05 options in ESM are converted which would reduce the distribution on a prorata basis.

The Notice of Acceptance of Offer to Purchase Participating Interest from QER noted the following conditions. “Ministerial consent will be required, given that the purchase will effect a change in interest of a mining tenement. QER proposes that completion of QER's purchase from Esperance occur on the date 7 business days after ministerial consent is received ( Completion Date ).

QER will arrange for payment to be made to Esperance on the Completion Date in exchange for:

• instrument of transfer (of the mining tenement and if necessary the environmental authority) executed by Esperance (and Greenvale if necessary); and

• deed of covenant between the JV participants to reflect the change in participating interests executed by Esperance and Greenvale.”

The ESM / GRV Heads of Agreement is subject to satisfaction of the following conditions precedent:

• a) the shareholders of ESM passing all resolutions as are required under the ASX Listing Rules and the Corporations Act to give effect to the transaction the subject of the Heads of Agreement;

• b) the shareholders of GRV passing all resolutions as are required under the ASX Listing Rules and the Corporations Act to give effect to the transaction the subject of the Heads of Agreement;

• c) all consents and approvals required under the Mineral Resources Act 1989 (Qld) being obtained; and

• d) all third party consents and waivers required to give effect to the transaction being obtained, including a waiver of any right of first refusal or agreement to exercise any preemptive right of QER in respect of the Lowmead Joint Venture and Nagoorin Joint Venture.

For further information please contact

Kris Knauer

Chairman

Mobile: +61 (0) 411 885 979 Fax: +61 (0)2 9299 9501 Email: kris.knauer@novuscapital.com.au Website: www.esperanceminerals.com