GREENWING RESOURCES LTD - Capital/Financing Update 2011

ABN 31 109 933 995

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Prospectus

Prospectus for a non-renounceable entitlement offer of one New Share for every three Shares held as at the Record Date together with one free attaching New Option for every one New Share issued.

The offer closes as at 5.00 pm (Perth time) on Tuesday, 18 October 2011.

THIS PROSPECTUS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION.

IF YOU ARE AN ELIGIBLE SHAREHOLDER, YOU SHOULD READ THIS PROSPECTUS IN ITS ENTIRETY BEFORE DECIDING WHETHER TO ACCEPT THE OFFER OF NEW SHARES AND NEW OPTIONS. YOUR ENTITLEMENT MAY HAVE VALUE AND YOU SHOULD THEREFORE CONSIDER WHETHER TO TAKE UP YOUR ENTITLEMENT RATHER THAN ALLOW IT TO LAPSE.

IF YOU DO NOT UNDERSTAND ANY PART OF THIS PROSPECTUS, OR ARE IN DOUBT AS TO HOW TO DEAL WITH IT OR YOUR ENTITLEMENT, YOU SHOULD CONSULT YOUR STOCKBROKER, ACCOUNTANT, LAWYER OR OTHER PROFESSIONAL ADVISER.

THIS DOCUMENT MAY NOT BE DISTRIBUTED IN THE UNITED STATES OR TO US PERSONS.

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IMPORTANT NOTICE

This document is a prospectus issued by Bass Metals Ltd for the purposes of the Corporations Act. This Prospectus is dated 15 September 2011 and was lodged with ASIC on that date. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No New Shares or New Options will be issued on the basis of this Prospectus after the date that is 13 months after the date of this Prospectus.

Bass Metals will apply for admission of the New Shares and New Options to quotation by ASX within 7 days after the date of this Prospectus.

Important document

It is important that you carefully read this Prospectus in its entirety before deciding to invest in the New Shares and New Options and, in particular, that you consider the risk factors outlined in section 3 of this Prospectus that could affect the performance of Bass Metals or the value of an investment in Bass Metals. You should carefully consider these factors in light of your personal circumstances (including financial and taxation issues) and seek professional advice from your accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest.

Disclaimer

No person is authorised to give any information or to make any representation in connection with the Entitlement Offer that is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied on as having been authorised by Bass Metals in connection with the Entitlement Offer. Neither Bass Metals nor any other person warrants the future performance of Bass Metals or any return on any investment made under this Prospectus, except as required by law and then, only to the extent so required.

Future performance and forward looking statements

Except as required by law, and then only to the extent required by law, neither Bass Metals nor any other person warrants the future performance of Bass Metals, the New Shares, the New Options or any return on any investment made by you under this Prospectus. The pro forma financial information provided in this Prospectus is for illustrative purposes only and does not represent a forecast or expectation by Bass Metals as to its future financial performance.

This Prospectus contains forward-looking statements, including the Cash Flow Estimate. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions, many of which are outside the control of Bass Metals and the Directors. These known and unknown risks, uncertainties and assumptions, could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by forward-looking statements. These risks, uncertainties and assumptions include but are not limited to the risks in section 3 of this Prospectus. Forwardlooking statements include those containing such words as "anticipate", "estimate", "expect", "opportunity", "plan", "intend", "aim", "seek", "believe", "should", "will", "may" or similar expressions.

Bass Metals and its Directors cannot, and do not, give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. Bass Metals has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law.

Restrictions on the distribution of this Prospectus

This Prospectus does not constitute an offer of New Shares or New Options in any place in which, or to any person to whom, it would not be lawful to do so. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and any person into whose possession this Prospectus comes (including nominees, trustees or custodians) should seek advice on, and observe, those restrictions. The New Shares and New Options have not been, and will not be, registered under the US Securities Act and may not be offered in the United States or to, or for the account of or benefit of, US Persons.

Defined terms and abbreviations

Terms and abbreviations used in this Prospectus are defined in the Glossary (see section 6).

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Prospectus availability

Printed copies of this Prospectus and a personalised Entitlement and Acceptance Form will be sent to Eligible Shareholders in Australia and New Zealand on or about 29 September 2011. Eligible Shareholders in Australia and New Zealand will only be entitled to accept the Offer by completing their personalised Entitlement and Acceptance Form.

Eligible Shareholders may also obtain a copy of this Prospectus during the Offer Period (free of charge) from the Company's website at www.bassmetals.com.au or by calling Bass Metals on +61 8 6315 1300 between 8.30 am and 5.00 pm (Perth time) Monday to Friday. Shareholders in other jurisdictions (including the US) are not entitled to access a copy of the Prospectus on the Company's website. Persons who access the electronic version of this Prospectus on the Company's website should ensure they download and read the entire Prospectus. The electronic version of the Prospectus on the Company's website will not include an Entitlement and Acceptance Form. None of the information on the Company's website is incorporated by reference into this Prospectus.

Australia and New Zealand

This Prospectus contains an offer to Eligible Shareholders in Australia or New Zealand of continuously quoted securities (as defined in the Corporations Act) and has been prepared in accordance with section 713 of the Corporations Act. The New Shares and New Options being offered under this Prospectus are being offered to Eligible Shareholders in New Zealand in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). This Prospectus is not an investment statement and has not been registered, filed with or approved by any New Zealand regulatory authority under or in accordance with New Zealand law. This Prospectus may not contain all the information that an investment statement or prospectus under New Zealand law is required to obtain.

Foreign jurisdictions

This Prospectus has been prepared to comply with the requirements of the securities laws of Australia. This Prospectus does not constitute an offer or invitation in any place in which, or to any person whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the New Shares or New Options or otherwise permit a public offering of the New Shares or New Options in any jurisdiction other than Australia or New Zealand. This Prospectus does not constitute an offer of securities in the US or to, or for the account or benefit of, any US Persons.

The distribution of this Prospectus outside Australia and New Zealand may be restricted by law. If you come into possession of this Prospectus, you should observe any such restrictions and should seek your own advice on such restrictions. Any failure to comply with such restrictions may contravene applicable securities laws.

None of the New Shares, New Options or the Entitlements under the Offer have been, or will be, registered under the US Securities Act or the securities laws of any state or other jurisdiction of the US, and may not be offered or sold in the US, or to, or for the account or benefit of, a US Person, except in a transaction exempt from the registration requirements of the US Securities Act and applicable US state securities laws.

Application for New Shares and New Options

If you wish to apply for New Shares and New Options, you must complete and return the personalised Entitlement and Acceptance Form which accompanies this Prospectus. Alternatively, if you are an Eligible Shareholder with an Australian bank account, you may elect to pay the Application Monies by BPAY[®] in accordance with the instructions on the Entitlement and Acceptance Form. In this case you do not need to submit an Entitlement and Acceptance Form. If you have not received a personalised Entitlement and Acceptance Form, please contact Bass Metals on +61 8 6315 1300.

Financial amounts

Money expressed in this Prospectus is in Australian dollars unless otherwise indicated.

Privacy

Please read the privacy statements in section 5.11. By submitting the Entitlement and Acceptance Form in or accompanying this Prospectus, or making a payment of the Application Monies for New Shares by BPAY®, you consent and agree to the matters outlined in section 5.11.

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KEY INVESTMENT ASPECTS

Offer Price	$0.15 per New Share
Entitlement	One New Share for every three Shares held
	at 5.00 pm (Perth time) on 23 September 2011
	together with one free attaching New Option
	for every one New Share issued
Exercise price and term of New Options	Each exercisable at $0.20 per Share
	on or before 30 September 2014
Maximum number of New Shares to be issued under	the Entitlement Offer 71,143,6081
Maximum number of New Options to be issued under the Entitlement Offer 71,143,6081
Maximum subscription amount to be raised under the	Entitlement Offer Up to $10,671,5411
Minimum subscription amount to be raised under the Entitlement Offer $8,000,0001

1 The maximum size of the Offer is an estimation based on currently available shareholding information. The exact maximum of the Offer will not be known until the Offer has closed and the reconciliation of Eligible Shareholders as at the Record Date has been completed.

KEY DATES

Announcement of Entitlement Offer		12 September 2011
Record Date for determining Entitlements	5.00 pm (Perth time) on 23 September 2011
Prospectus and Entitlement and Acceptance Forms	dispatched	29 September 2011
Opening Date of Entitlement Offer		29 September 2011
Closing Date and final time for receipt of Entitlement
and Acceptance Forms and payment *		5.00 pm (Perth time) on 18 October 2011
Allotment of New Shares and New Options and
despatch of holding statements		26 October 2011

These dates are subject to change and are indicative only. Bass Metals reserves the right to amend this indicative timetable. In particular, Bass Metals reserves the right, subject to the Corporations Act and the ASX Listing Rules, to extend the Closing Date or to withdraw the Entitlement Offer without prior notice. Any extension of the Closing Date will have a consequential effect on the date for the issue of New Shares and New Options.

Payment by BPAY® may only be made before 3:00pm (Perth Time) on the Closing Date.

LETTER FROM THE CHAIRMAN

1.	DETAILS OF THE OFFER	6
2.	PURPOSE AND EFFECT OF THE OFFER ON THE COMPANY	13
3.	RISK FACTORS	30
4.	TERMS AND CONDITIONS OF NEW SHARESAND NEW OPTIONS	39
5.	ADDITIONAL INFORMATION	42
6.	GLOSSARY OF TERMS	54

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LETTER FROM THE CHAIRMAN

15 September 2011

Dear Shareholder

On behalf of Bass Metals, I am pleased to invite you to participate in this Offer of New Shares and New Options in Bass Metals. This non-renounceable entitlement offer entitles Eligible Shareholders to acquire one New Share in Bass Metals for every three Shares held as at 5.00 pm (Perth time) on 23 September 2011 together with one free attaching New Option exercisable at $0.20 per Share on or before 30 September 2014 for every one New Share issued subject to the terms of the Offer outlined in this Prospectus.

Helmsec Global Capital Limited is the lead manager of the Offer. The Offer is not underwritten.

The purpose of the Offer is to raise a minimum of $8.0 million and a maximum of approximately $10.7 million, in addition to the $13 million increase to Bass Metals‟ Corporate Loan Facility with RMB Australia announced on 12 September 2011, to provide total new funding of up to approximately $23.7 million (before costs). The funds from this Offer and the increased debt facility are intended to be used to:

manage a short-term working capital requirement largely associated with Bass Metals‟ Hellyer Mine Project;
maintain an appropriate working capital position; and
sustain a large scale exploration and refractory gold recovery feasibility study program.

Bass Metals has responded quickly and decisively to several unexpected technical events at its Hellyer Mine Project to place those operations back on track to generate positive cash flows with which to further develop and grow the asset base of Bass Metals. The robust nature and the growth potential of those assets, as well as the management capacity of Bass Metals has been recognised through the ongoing support of RMB Australia, through the $13 million increase to Bass Metals‟ existing Corporate Loan Facility.

The Board and I consider that Bass Metals has an exciting array of growth opportunities such as new exploration prospects and a large scale gold-silver resource; all underpinned with a robust Cash Flow Estimate from the Fossey Mine.

Your Entitlement to New Shares and New Options is set out in the accompanying Entitlement and Acceptance Form. You also have the ability to apply for New Shares and New Options in excess of your Entitlement at the Offer Price.

Details of the Entitlement Offer are included in this Prospectus. I recommend that you read it carefully, including the risk factors set out in section 3, before making your investment decision. If you are in any doubt regarding the action you should take, please contact your professional adviser.

On behalf of the Board, I thank you for your support of Bass Metals and invite you to consider this investment opportunity.

Yours sincerely

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Don Boyer Chairman

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1. DETAILS OF THE OFFER

1.1 Structure of the Offer

The Offer is structured as a non-renounceable entitlement offer to existing Shareholders on the basis of one New Share for every three Shares held at 5:00 pm (Perth time) on 23 September 2011 at an issue price of $0.15 per New Share together with one free attaching New Option exercisable at $0.20 per Share on or before 30 September 2014 for every one New Share issued.

The Offer is non-renounceable, which means that the Entitlements are non-transferable and cannot be sold or traded, and Shareholders will not receive any value in respect of Entitlements that they do not take up or which they are ineligible to receive.

Eligible Shareholders can also subscribe under the Offer for New Shares and New Options in excess of their Entitlements. However, no Eligible Shareholder is assured of being allocated any New Shares and New Options in excess of the number he or she is entitled to pursuant to his or her Entitlement.

Where fractions arise in calculation of Entitlements, they will be rounded down to the nearest whole number of New Shares.

The Offer is only open to Eligible Shareholders except where, in limited circumstances and in Bass Metals' absolute discretion, Bass Metals may elect to treat as Eligible Shareholders certain institutional and sophisticated Shareholders who would otherwise not be Eligible Shareholders because their registered addresses are not in Australia or New Zealand. Bass Metals reserves the right to reject any application that it believes comes from a person who is not an Eligible Shareholder.

The Offer is a pro rata offer to Eligible Shareholders. An Eligible Shareholder who takes up his or her Entitlements in full, and subsequently exercises the New Options he or she receives, will not have his or her percentage shareholding in Bass Metals diluted by the Offer.

If fully subscribed, the Offer will result in the issue of approximately 71.1 million New Shares at the Offer Price and 71.1 million New Options and will raise up to approximately $10,670,000 before the costs of the Offer, which are expected to be approximately $738,000.

1.2 Minimum subscription amount to be raised

The minimum subscription amount to be raised under this Prospectus is $8 million (before costs of the Offer), to be achieved through the issue of at least 53.3 million New Shares at the Offer Price and at least 53.3 million New Options.

No New Shares or New Options will be issued until the minimum amount has been received. If the minimum subscription amount of $8 million is not achieved, Bass Metals will either repay all Application Monies (without interest) or issue a supplementary prospectus and allow Applicants one month to withdraw their Application and be repaid their Application Monies. Details of the application of the Offer proceeds if only the minimum subscription amount is raised are set out in section 2.1 of this Prospectus.

1.3 Investment highlights

Right address – a productive and highly prospective neighbourhood in an established mining state – Tasmania.
Right team – an experienced board and management team with 200+ years combined project development and operational experience.
Cash flow from operations – Hellyer Mine Project forecast to produce site operating surplus cash of approximately $55 million to the end of FY2013.
Exploration upside – encouraging near-mine exploration results point to the potential for mine life extensions at the Hellyer Mine Project.

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Tangible, gold project growth option – an extensive above ground gold and base metals resource inventory within the Hellyer Tailings Storage Facility.
Attractive investment proposition – opportunity to invest at an attractive Share price and benefit from operational optimisation and future growth.

1.4 Summary of key risks

Water management – risks associated with water inflow and requirement to dewater through pumping at the Fossey Mine at the Hellyer Mine Project.
Mining risk – failure to produce ore at the rate predicted from the Fossey Mine at the Hellyer Mine Project.
Grade control risk – inability to deliver ore to the mill at the metal grades predicted from modelling infill drilling data at the Hellyer Mine Project.
Commodity pricing risk – the Company‟s revenues will likely fall if global metal prices fall and/or the A$ appreciates against the US$.
Failure to access increased Corporate Loan Facility – failure to enter into definitive binding documentation for the Company's increased Corporate Loan Facility or to meet the conditions precedent of that facility set out in section 5.3, and the consequent inability to access the $13 million in additional funding (noting that the Company is confident of meeting such conditions within the timeframes required).
Resource risk – tonnes and grades of Mineral Resources and Ore Reserves are estimates only and may be subject to change.

A detailed summary of key risks is provided in section 3.

1.5 Eligible Shareholders

The Offer is an offer to Eligible Shareholders. Eligible Shareholders are those Shareholders who:

(a) are registered as Shareholders at 5:00 pm (Perth time) on 23 September 2011;
(b) have a registered address in Australia or New Zealand;
(c) are not in the US and are not US Persons, or acting for the account or benefit of, a US Person; and
(d) are eligible under all applicable securities laws to receive an offer under the Offer.

By returning a completed Entitlement and Acceptance Form, or making a payment of the Application Monies by BPAY[®] , persons claiming to be Eligible Shareholders will be taken to have represented and warranted that they satisfy each of the above criteria. Bass Metals reserves the right to reject any application that it believes comes from a person who is not an Eligible Shareholder.

Bass Metals, in its absolute discretion, reserves the right to determine whether a Shareholder is an Eligible Shareholder or an Ineligible Shareholder and, therefore, unable to participate in the Offer. Bass Metals disclaims all liability to the maximum extent permitted by law in respect of any determination as to whether a Shareholder is an Eligible Shareholder or an Ineligible Shareholder.

It is the sole responsibility of each Applicant to ensure compliance with the laws of any country relevant to their Application.

Shareholders who hold Shares on behalf of persons whose registered address is not in Australia or New Zealand are responsible for ensuring that accepting the Offer does not breach securities laws in the relevant overseas jurisdictions. Shareholders who are nominees, trustees or custodians are, therefore, advised to seek independent advice as to how they should proceed.

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1.6 Ineligible Shareholders

Bass Metals is of the view that it is unreasonable to extend the Offer to Ineligible Shareholders, having regard to:

(a) the number of Ineligible Shareholders;
(b) the number and value of the New Shares and New Options which would be offered to Ineligible Shareholders if they were Eligible Shareholders; and
(c) the cost of complying with the legal requirements, and requirements of the regulatory authorities, in the respective overseas jurisdictions.

Accordingly, the Entitlement Offer is not being extended to any Shareholders with a registered address outside Australia and New Zealand, or to any Shareholder who is in the US or is, or is acting for the account or benefit of, a US Person. Bass Metals will send Ineligible Shareholders details of the Entitlement Offer and advise that Bass Metals is not extending the Entitlement Offer to Ineligible Shareholders.

However, in limited circumstances and in Bass Metals' absolute discretion, Bass Metals may elect to treat as Eligible Shareholders certain institutional or sophisticated Shareholders who would otherwise not be Eligible Shareholders because their registered addresses are not in Australia or New Zealand.

1.7 How to apply for New Shares and New Options under the Offer

Before taking any action in relation to the Offer, Eligible Shareholders should read this Prospectus in its entirety, particularly the risk factors set out in section 3.

Each Eligible Shareholder is entitled to apply for one New Share for every three Shares held by the Eligible Shareholder at 5.00 pm (Perth time) on the Record Date, together with one free attaching New Option for every one New Share issued. The amount of the Entitlement is shown on the personalised Entitlement and Acceptance Form accompanying this Prospectus.

The Offer Price is $0.15 per New Share. This is payable on applying for New Shares. There is no consideration payable for the issue of New Options.

Eligible Shareholders may apply for all of their Entitlement, part of their Entitlement or none of their Entitlement. Eligible Shareholders may also apply for New Shares and New Options in excess of their Entitlement as detailed in section 1.8. The Entitlements are personal and cannot be traded, transferred, assigned or otherwise dealt with.

Eligible Shareholders may only apply for New Shares by using the personalised Entitlement and Acceptance Form accompanying this Prospectus or, if they have an Australian bank account, by BPAY[®] payment in accordance with the instructions on that Entitlement and Acceptance Form. The Closing Date for receipt by the Share Registry of Valid Applications is 5.00 pm (Perth time) on 18 October 2011. Eligible Shareholders should return their completed Entitlement and Acceptance Form and their cheque, bank draft or money order for the relevant Application Monies and ensure it is received by the Share Registry in cleared funds before that time. Payment by BPAY[® ] may only be made before 3:00pm (Perth Time) on 18 October 2011.

Cheques, bank drafts and money orders must be:

(a) in Australian currency drawn on an Australian branch of a financial institution;
(b) made payable to "Bass Metals Limited – Entitlement Offer Account"; and
(c) crossed "Not Negotiable".

Cash payments will not be accepted. Receipts for payment will not be issued.

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Payment by BPAY[®] must be in accordance with the instructions on the personalised Entitlement and Acceptance Form. The biller code and reference number appears on that form.

If you pay by BPAY[®] and do not pay for your full Entitlement, the remaining Entitlement will be treated as not having been taken up.

Eligible Shareholders are not required to submit a completed Entitlement and Acceptance Form if they pay their Application Monies by BPAY[®] but are taken to make the statements on the Entitlement and Acceptance Form and make the representations as set out in sections 0.

Completed Entitlement and Acceptance Forms, together with cheques, bank drafts or money orders can be sent to the Share Registry using the reply paid envelope enclosed with the Prospectus.

Alternatively, completed Entitlement and Acceptance Forms, together with cheques, bank drafts or money orders can be sent to the Share Registry at:

money orders can be sent to the Share Registry	at:
Postal address	Hand deliveries
Computershare Investor Services Pty Ltd Locked Bag 2508 Perth Western Australia 6001	Computershare Investor Services Pty Ltd Level 2, 45 St George‟s Terrace Perth Western Australia 6000

Once you have submitted an Application, it is irrevocable and cannot be varied or withdrawn except as allowed by law.

Bass Metals reserves the right to extend the Closing Date without notice, subject to the Corporations Act, the ASX Listing Rules and other applicable laws. For Eligible Shareholders who do not accept the Offer in full by the Closing Date, the Offer will lapse in respect of those New Shares and New Options that they did not accept and their proportion of ownership in Bass Metals may be diluted if New Shares are issued under the Offer and New Options issued under the Offer are subsequently exercised.

No brokerage or stamp duty is payable on the issue of New Shares or New Options.

1.8 Applying for New Shares and New Options in excess of your Entitlement

Eligible Shareholders also have the opportunity to apply for New Shares and New Options in excess of their Entitlement at the Offer Price. These New Shares and New Options may be sourced from Entitlements not taken up by other Eligible Shareholders and the Entitlements that would have accrued to Ineligible Shareholders if they had been eligible to participate in the Offer.

If your Application Monies exceed the amount of Application Monies required in order for you to take up your Entitlement, you will be taken to have applied for such number of New Shares and New Options in excess of your Entitlement at the Offer Price.

There is no guarantee that Eligible Shareholders who apply for New Shares and New Options in excess of their Entitlement will be allocated all or any of the New Shares or New Options applied for in excess of their Entitlement. The number, if any, of New Shares and New Options Eligible Shareholders may be issued in excess of their Entitlement will depend on demand for New Shares from other Eligible Shareholders and any other investors to whom the Board may in its discretion offer New Shares and New Options comprised in any Shortfall.

1.9 What to do if you do not wish to accept any of your Entitlement

If you do not wish to accept any part of your Entitlement, you should do nothing.

1.10 Shortfall

The Board reserves the right to place any Shortfall, other than to related parties of the Company, at the discretion of the Board within three (3) months of the Closing Date in accordance with ASX Listing Rule 7.2 (exception 3). The Shortfall will be offered by the Directors pursuant to this Prospectus at the same Offer Price as offered under the Entitlement Offer, together with one free

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attaching New Option. The Board may, in its absolute discretion, invite other new investors and/or existing Shareholders to apply for New Shares and New Options comprised in any Shortfall. If there is a Shortfall and it is insufficient to satisfy applications, the Board‟s decision as to the number of New Shares and New Options to be issued, and to whom, is final.

The offer of any New Shares and New Options comprised in any Shortfall is a separate offer made pursuant to this Prospectus and will remain open for up to 3 months following the Closing Date. The purpose of offering New Shares and New Options comprised in the Shortfall is to comply with section 708A(11) of the Corporations Act so that sophisticated and professional investors issued New Shares and New Options pursuant to the placement of the Shortfall by the Lead Manager can sell their New Shares and New Options within the next twelve months without the issue of a prospectus.

You may apply for any New Shares and New Options comprised in any Shortfall by completing the relevant section of your Entitlement and Acceptance Form sent with the Prospectus or, for sophisticated and professional investors, pursuant to a separate application form provided by the Lead Manager. Payment for New Options and New Shares comprised in the Shortfall must be made in the same manner as described in section Error! Reference source not found. of the Prospectus.

1.11 Representations by acceptance

By completing and returning your personalised Entitlement and Acceptance Form, or making a payment of Application Monies by BPAY[®] , you will be deemed to have represented to Bass Metals that you are an Eligible Shareholder and:

(a) acknowledge that you have read and understand this Prospectus and your Entitlement and Acceptance Form in their entirety;
(b) agree to be bound by the terms of the Entitlement Offer, the provisions of this Prospectus, and the Company's constitution;
(c) authorise Bass Metals to register you as the holder of New Shares and New Options allotted to you;
(d) declare that all details and statements in the Entitlement and Acceptance Form are complete and accurate;
(e) declare you are over 18 years of age and have full legal capacity and power to perform all your rights and obligations under the Entitlement and Acceptance Form;
(f) acknowledge that once Bass Metals receives your Entitlement and Acceptance Form or any payment of Application Monies, you may not withdraw your application or funds provided except as allowed by law;
(g) agree to apply for and be issued up to the number of New Shares and New Options specified in the Entitlement and Acceptance Form, or for which you have submitted payment of any Application Monies, at the Offer Price per New Share;
(h) authorise Bass Metals, the Lead Manager, the Share Registry and their respective officers or agents to do anything on your behalf necessary for New Shares and New Options to be issued to you, including to act on instructions of the Share Registry upon using the contact details set out in your Entitlement and Acceptance Form;
(i) declare that you were the registered holder(s) at the Record Date of the Shares indicated on the Entitlement and Acceptance Form as being held by you on the Record Date;
(j) acknowledge that the information contained in this Prospectus and your Entitlement and Acceptance Form is not investment advice nor a recommendation that New Shares or New Options are suitable for you given your investment objectives, financial situation or particular needs;

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(k) acknowledge that none of Bass Metals, the Lead Manager, or their respective related bodies corporate and affiliates and their respective directors, officers, partners, employees, representatives, agents, consultants or advisers, guarantees the performance of Bass Metals, nor do they guarantee any return on investment;
(l) agree to provide (and direct your nominee or custodian to provide) any requested substantiation of your eligibility to participate in the Entitlement Offer and of your holding of Shares on the Record Date;
(m) authorise Bass Metals to correct any errors in your Entitlement and Acceptance Form or other form provided by you; and
(n) represent and warrant that the law of any place does not prohibit you from being given this Prospectus and the Entitlement and Acceptance Form, nor does it prohibit you from making an application for New Shares and New Options and that you are otherwise eligible to participate in the Entitlement Offer.

1.12 New Zealand Shareholders

This Prospectus is not a New Zealand prospectus or an investment statement and has not been registered, filed with or approved by any New Zealand regulatory authority under or in accordance with the Securities Act 1978 (or any other relevant New Zealand law). This Prospectus may not contain all the information that an investment statement or prospectus under New Zealand law is required to contain. Securities are offered to the public of New Zealand under this Prospectus in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand).

1.13 US representations

If you submit an Entitlement and Acceptance Form, or make a payment of Application Monies by BPAY[®] , or otherwise apply to participate in respect of New Shares and New Options you will be deemed to have represented, warranted and agreed, on behalf of yourself and each person or account for which you are acting, that:

(a) you understand and acknowledge that none of the Entitlements, New Shares or New Options have been, or will be, registered under the US Securities Act or any US state or other securities laws in any jurisdiction, and may not be offered, sold or otherwise transferred except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and any other applicable securities laws;
(b) you are not in the US and are not acting for the account or benefit of a person in the US; and
(c) you have not sent and will not send this Prospectus, the Entitlement and Acceptance Form or any other material relating to the Entitlement Offer to any person in the US.

1.14 Rights and liabilities attaching to New Shares and New Options

The New Shares offered under this Prospectus will, from their date of issue, rank equally in every respect with all existing Shares then on issue. A summary of the rights and liabilities attached to Shares is set out in section 4.1.

A summary of the rights and liabilities attached to New Options is set out in section 4.2.

1.15 Issue of New Shares

Bass Metals expects to allot the New Shares and New Options, and despatch holding statements in relation to them, on 26 October 2011.

1.16 ASX quotation

Bass Metals will apply for admission of the New Shares and New Options to quotation by ASX within 7 days after the date of this Prospectus. If the New Shares and the New Options offered by this Prospectus are not admitted to quotation within 3 months after the date of this Prospectus (or any

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longer period permitted by ASIC) any issue of New Shares and New Options is void and Bass Metals will repay, as soon as practicable, without interest, all Application Monies received under this Prospectus.

Subject to approval being granted by ASX, it is expected that the quotation and trading of New Shares and New Options issued under the Entitlement Offer will commence on ASX on a normal basis on 27 October 2011.

Applicants who sell New Shares or New Options before they receive their holding statements will do so at their own risk. Each of Bass Metals and the Lead Manager disclaims all liability, in tort (including negligence), statute or otherwise, to persons who trade New Shares or New Options before receiving their holding statements.

1.17 Application Monies and interest

Application Monies received from Applicants will, until the New Shares in respect of the Application Monies are issued, be held by Bass Metals in a trust account. If you are allotted less than the number of New Shares you applied for, you will receive a refund for the relevant amount of Application Monies (without interest) not applied towards the issue of New Shares, as soon as practicable after the Closing Date.

Bass Metals reserves the right to withdraw the Offer and this Prospectus at any time, in which case Bass Metals will refund Applications Monies without interest.

To the fullest extent permitted by law, each Applicant agrees that Application Monies will not bear or earn interest for the Applicant, irrespective of whether or not all or any of the New Shares applied for by the Applicant are issued to the Applicant, and that any interest earned on Application money held by Bass Metals shall be the property of Bass Metals.

1.18 Risk factors

In addition to the general risks applicable to all investments in listed companies, there are specific risks associated with an investment in Bass Metals, which are set out in section 3 of this Prospectus.

1.19 Taxation implications

Taxation implications will vary depending on the specific circumstances of individual Shareholders. Further, tax rules or their interpretation in relation to equity investments may change following the completion of the Offer. You should obtain your own professional advice before concluding on the particular taxation implications that will apply to you if you participate in the Offer.

1.20 Market prices of existing Shares on ASX

Bass Metals' Shares have been in voluntary suspension since 13 July 2011. The latest available market sale price of Bass Metals‟ existing Shares on ASX prior to the date of lodgement of this Prospectus was $0.22 per Share on 8 July 2011.

The highest and lowest market sale prices of Bass Metals‟ existing Shares on ASX during the 3 months immediately prior to the lodgement of this Prospectus with ASIC is set out below:

3 month low Share price	3 month high Share price
$0.19 on 16 and 20 June 2011	$0.235 on 1 July and 7 July 2011

1.21 Enquiries

Enquiries concerning the Entitlement and Acceptance Form should be directed to Computershare on 1300 850 505.

Enquiries relating to this Prospectus should be directed to Bass Metals by telephone on + 61 8 6315 1300 between 8:30 am and 5:00 pm (Perth time).

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2. PURPOSE AND EFFECT OF THE OFFER ON THE COMPANY

2.1 Purpose of the Offer

The purpose of the Offer is to raise a minimum of $8.0 million and a maximum of $10.7 million before fees and costs of the Offer. This is in addition to the recently announced $13 million increase to Bass Metals‟ Corporate Loan Facility as summarised in section 5.3. Combined, these fundraising initiatives will provide total new funding of up to $23.7 million (before costs). The final amount raised under the Offer will depend on the extent that Eligible Shareholders take up their Entitlements and, together with other investors, apply for any Shortfall. Bass Metals expects fees and costs relating to the Offer to be approximately $738,000, assuming the maximum subscription amount is raised, or approximately $562,000 if only the minimum subscription amount is raised, as set out in section 5.8.

The requirement for these fundraising initiatives arose largely from two separate adverse and unforeseeable technical issues relating to the Hellyer Mine Project that emerged in early June 2011:

persistent grade short fall from the Fossey Mine, and
extraordinarily high water inflow into the Fossey Mine when mine development intersected a local fault structure.

The impact of these events on Bass Metals‟ short term cash flow position has been to:

put mine development to access the ore further in arrears;
delay the milling campaign schedule, which deferred receipt of concentrate sales revenue;
lower concentrate sales revenue due to the reduced grades that caused lower concentrate production; and
increase costs, principally for dewatering and ground support, at the Hellyer Mine Project.

This resulted in a mismatch between the timing of revenue and costs that rapidly led to an overall cash shortfall for the Company of $12 million to $17 million in July 2011 compared to the cash position expected from earlier budgets which were prepared in March and May 2011.

2.2 Operational background and key technical issues relating to the Offer

This section provides background to Bass Metals‟ operations including details of key technical issues relating to the Hellyer Mine Project, leading to the requirement for the Offer.

2.2.1 Revised Fossey Mine plan

An updated mine plan was completed in July 2011 in order to address these technical issues. This plan focuses only on the high-grade massive base metal sulphide portions of a revised geological model for the Fossey Mine. The revised plan allows for additional expenditure to be allocated to ground support and dewatering services and assumes a less aggressive ore production rate.

Resource model

The original Fossey Mine development plan was based on an Ore Reserve defined by diamond drill holes at a nominal 25 metre spaced centres with the intention of infill grade control drilling to 12.5 metre spaced centres from underground to provide the level of detail required for final stope designs. This is the same strategy as was employed at the adjacent Hellyer and Que River deposits, and was endorsed by Bass Metals‟ technical team and an independent consultant.

This infill drilling has now been completed and geological interpretation of the infill drilling data resulted in a revised Mineral Resource estimate for Fossey as presented in Table 1. The revised Fossey Mineral Resource is reported in accordance with the JORC Code. A Competent Persons statement is provided in section 5.9.

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Table 1: Fossey Mineral Resource estimate as at 30 June 2011 (at a 5% lead+zinc cut-off)

Tonnes '000	Copper %	Lead %	Zinc %	Silver g/t	Gold g/t
286	0.6	7.4	14.2	137	2.9
108	0.4	6.8	11.0	120	1.8
66	0.3	4.7	8.4	94	2.1
460	0.5	6.9	12.6	127	2.5

1 Note rounding errors will occur.

Revised Ore Reserve

A revised ore Reserve has been estimated based on the updated Mineral Resource and is summarised in Table 2. The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources used to produce the Ore Reserve. The Ore Reserve is reported in accordance with the JORC code. A Competent Persons' statement is provided in section 5.9.

Table 2: Fossey Ore Reserve estimate as at 30 June 2011 (at a 5% lead+zinc cut-off)

CATEGORY	Tonnes '000	Copper %	Lead %	Zinc %	Silver g/t	Gold g/t

Proven	269	0.5	6.7	12.9	123	2.6
Probable	170	0.2	3.4	5.6	71	1.5
Total	439	0.4	5.4	10.1	103	2.2
Underground Stock (Proven)	37	0.3	3.3	5.7	83	1.9
Surface Stockpiles (Proven)	18	0.3	5.1	9.1	137	2.3
Total Reserve1	495	0.4	5.3	9.7	103	2.2

1 Note rounding errors will occur.

Reconciliation between actual milled ore tonnages and metal grades against predicted mined ore tonnages and metal grades for the most recent milling campaign are presented in Table 3. Variances within +/- 10% for ore tonnes and metal grades, validate the revised Resource model and mine plan.

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Table 3: Mine to mill (Actual) comparison

	Units	Mine plan	Actual	% Variance

Tonnes	„000	52.0	52.9	2%
Zinc	%	9.2	8.9	-4%
Lead	%	5.1	5.6	10%
Copper	%	0.5	0.4	-4%
Silver	g/t	119	118	-1%
Gold	g/t	1.82	1.85	2%

The Company has revised its Fossey Mine budget based on the revised Hellyer Mine Project operating plan, with the key changes including:

extra $2 million of capital allocated to further upgrade the mine dewatering system and ancillary services;
reduction in budgeted ore production rate to a monthly average of approximately 30,000 tonnes (compared to the previous rate of 40,000 tonnes per month); and
higher mining costs now assessed at $84/tonne of ore (compared to $42/tonne previously). Approximately 60% of this increase is from additional costs, whilst the balance is a result of less tonnes over which to allocate the mine fixed costs, which comprise 60 to 70% of the total mine cost.

2.2.2. Hellyer processing operation

Due to the large scale of the 1.5mtpa capacity Hellyer Mine Project process plant compared to the planned annual ore production rate of 0.35mtpa it is necessary to process ore on an approximate alternate month campaign basis. Operating parameters such as throughput, recovery and concentrate quality have continued to improve since the first campaign commenced in February 2011. The most recent, fifth campaign of 52,863 tonnes was completed on 25 August 2011. The performance of the lead and zinc circuits was generally close to plan with good quality concentrates produced, whilst the copper circuit underperformed with respect to copper recovery as summarised in Table 4. Further modifications to the plant and the copper circuit in particular are currently being implemented to improve all metal recoveries.

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Table 4: Mill production


Zinc concentrate
	Units	Millplan	Actual	% Variance
Tonnes	t	6,486	6,060	-7%
Zinc grade	%	51.6	53.2	3%
Zinc recovery	%	70	69	-2%
Silver grade	g/t	150	169	13
Lead concentrate
	Units	Millplan	Actual	% Variance
Tonnes	t	2,987	2,966	-1%
Lead grade	%	57.5	60.7	6
Lead recovery	%	65	61	-6%
Silver grade	g/t	478	641	34%
Gold grade	g/t	2.4	1.2	-51%
Copper concentrate
	Units	Millplan	Actual	% Variance
Tonnes	t	563	251	-55%
Copper grade	%	16.8	19.6	17%
Copper recovery	%	40	22	-46%
Silver grade	g/t	4,259	6,317	48%
Gold grade	g/t	9	19.8	119%
Lead grade	%	6.7	8.3	24%

Processing assumptions in the production plan are based largely on actual performance to date in terms of throughput, costs and recoveries.

Process costs in the revised budget have been factored up by 25% to the original plan reflecting fixed costs being allocated over lower tonnes and also some increased input costs such as labour, power and grinding media.

2.2.3 Cash Flow Estimate

Based on the revised Hellyer Mine Project plan outlined in sections 2.2.1 and 2.2.2 and the key assumptions outlined in section 2.2.4, the Company has prepared a Cash Flow Estimate as summarised in Table 5. The Cash Flow Estimate incorporates forecast production and revenue from the Fossey ore Reserve at the Hellyer Mine Project.

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This Cash Flow Estimate assumes that only the minimum amount of $8 million is raised and that the Corporate Loan Facility, extended by $13 million limit, is drawn by an additional $9 million. The Cash Flow Estimate indicates Bass Metals can expect to maintain a minimum cash position of at least $6 million from October 2011, with a total closing cash position of $18 million estimated as at 30 June 2012.

This Cash Flow Estimate is included to give Eligible Shareholders an indication of Bass Metals‟ estimated cash position during FY2012 and FY2013 following completion of the Offer and draw down under the Company's extended Corporate Loan Facility. It is based on the:

studies upon which the revised mine plan is based;
Bass Metals‟ operational performance since late July 2011 under that revised mine plan; and
Bass Metals‟ best estimate assumptions, outlined in section 2.2.4, that have been made based on an assessment of present economic and operating conditions.

The Directors consider that there are reasonable grounds for the Cash Flow Estimate on this basis.

On the basis of the Cash Flow Estimate, and assuming that the full amount under the Corporate Loan Facility is drawn down by Bass Metals, the Directors consider that Bass Metals will have adequate cash available to meet its business objectives for FY2012 and FY2013 even if only the minimum subscription amount is raised under the Offer. The maximum subscription amount under the Offer has been targeted to enable a higher level of discretionary expenditure, for example on exploration, whilst maintaining a robust cash buffer.

The Cash Flow Estimate is not a guarantee of future performance and is subject to known and unknown risks, uncertainties and assumptions, many of which are outside the control of Bass Metals and the Directors and are not readily predictable. These known and unknown risks, uncertainties and assumptions, could cause actual cash flows to differ materially from the Cash Flow Estimate. These risks, uncertainties and assumptions include but are not limited to the risks in section 3 of this Prospectus.

Table 5: Cash Flow Estimate (from 1 September 2011)

	FY2012 ($’000)	FY2013 ($’000)	Combined ($’000)

Opening Cash1	$1,757	$17,925	na
Hellyer Mine Project Receipts2 Tasmanian Costs (All)	$76,665 ($57,427)	$62,194 ($26,846)	$138,859 ($84,273)
Site Operating Surplus	$19,238	$35,348	$54,586
Exploration/Feasibility Costs Corporate Costs (All) Debt Service & Repayment	($4,671) ($2,844) ($11,513)	($4,457) ($3,237) ($14,074)	($9,128) ($6,081) ($25,587)
Estimated Expenditure	($19,028)	($21,768)	($40,796)
New Equity (Net) New Debt (Net) Estimated Closing Cash	$7,438 $8,520 $17,925	$0 $0 $31,505	$7,438 $8,520 na
Estimated Closing Debt	$16,251	$3,251	na

Opening cash for FY2012 is as at 1 September 2011.
The Hellyer Mine Project receipts are based solely on production from the Fossey ore Reserve. These receipts are net of hedge settlements.

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2.2.4 Bass Metals’ best estimate assumptions underlying the Cash Flow Estimate

The key assumptions underlying the Cash Flow Estimate are set out below. The information in this section regarding Bass Metals‟ best estimate assumptions is intended to assist potential investors in assessing the reasonableness and likelihood of the key assumptions underlying the Cash Flow Estimate being achieved, and is not intended to be a representation that those events that have been assumed will occur. You should not place undue reliance on the Cash Flow Estimate.

General assumptions

The following general assumptions were made in preparing the Cash Flow Estimate:

there is no material adverse change in the economic conditions in the markets in which Bass Metals operates;
there is no material amendment to any material agreement relating to Bass metals‟ business;
there is no material change to the regulatory or tax regimes which will have an impact on Bass Metals‟ cash flows;
there is no significant disruption to the continuity of operations of Bass Metals and there are no other material changes in Bass Metals‟ business; and
there are no material business acquisitions or disposals.

Metal prices and sales of concentrate

The Hellyer Mine Project produces three concentrate products; zinc, lead and copper-silver concentrates. Bass Metals is paid for five metals (zinc, lead, copper, silver and gold) across those concentrate products. The underlying metal prices assumed in the Cash Flow Estimate are presented in Table 6, however certain of these metals are subject to the forward sales commitments entered into by the Company in which case these forward prices for the volume of product sold have been assumed in the Cash Flow Estimate.

Table 6: Metal prices & exchange rates assumptions

Metal	Unit	Assumed Prices	Current prices1
Zinc	US$/t	$2,293	$2,240
Lead	US$/t	$2,577	$2,415
Copper	US$/t	$9,031	$9,092
Silver	US$/oz	$37	$42
Gold	US$/oz	$1,538	$1,817
AUD	US$	1.06	1.07

Current prices are as at 8 September 2011.

Actual metal prices and the price Bass Metals receives for sales of its concentrate may differ from these Assumed Prices, and are subject to the risks set out in section 3, particularly under the heading "Commodity price fluctuations".

The Directors consider that the Assumed Prices are reasonable having compared the prices to; current prices, the forward market price curve for each metal in $A and medium term historical price trends.

A sensitivity analysis has also been undertaken to assess the impact on the Cash Flow Estimate of using either current market prices as presented in Table 6 above or adopting an adverse movement in the Assumed Prices in Table 6 by 20%. The results are included in the sensitivity analysis discussion in section 2.2.5.

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The revenue received by Bass Metals from its customers is based on open market prices (eg the London Metal Exchange) quoted for the payable metals contained in each of the concentrate products. Bass Metals invoices its customers based on the gross contained metal value per dry tonne of concentrate less standard agreed deductions based on smelting and certain logistical costs. The payment factors and deductions are defined in concentrate sales agreements for each product. Bass Metals has sales agreements covering all concentrate production from the Fossey orebody for the duration that Fossey ore is mined and processed. Deductions are subject to review every year.

Production rates

A reduction in budgeted ore production rate to a monthly average of approximately 30,000 tonnes under the revised mine plan (compared to the previous rate of 40,000 tonnes per month) has been assumed.

This production is sourced solely from the Fossey ore Reserve and production at this rate is supported by the studies upon which the revised mine plan is based and the Company's operational performance in the mine since ore production from stopes commenced in February 2011. The Company's actual rate of production may, however, differ from this estimated rate, and is subject to the risks set out in section 3, particularly under the headings "Production estimates" and "Metallurgy”.

Operating costs

Operating costs are forecast to total $162/tonne of ore over the remaining life of the Fossey Mine, whilst capital costs are forecast to total $7/t of ore, largely in the underground mine. Operating costs comprise all production costs, transport costs of product to port, site administration and environmental costs as well as all royalty obligations.

Mining and processing costs have been estimated based on the Company‟s operational experience since January 2011 and several studies comprising the basis of the revised operating plan. They take into account current contractual arrangements for services, consumables and labour.

Mining is undertaken by a contractor under an alliance agreement whereby Bass Metals pays the contractor on a cost plus an agreed range of margins, with a profit incentive royalty payable after Bass has recouped all pre-production and establishment costs.

Upgrade of mine dewatering system and ancillary services

As noted in section 2.2.1, $2 million of capital has been allocated to further upgrade the mine dewatering system and ancillary services. This cost is expected to be incurred largely from September to November 2011. The cost of this upgrade is supported by an internal study and external quotes for equipment.

Selling costs

Selling costs have been estimated on the basis of current agreements including contractual arrangements. Government royalties payable on sales have been estimated at the current royalty rate of 5% of the value of smelter payments less any logistical expenses.

The Company's actual operating costs may, however, differ from this estimated rate, and are subject to the risks set out in section 3, particularly under the heading "Operating costs".

Corporate debt position

The Company has fully secured debt and hedging facilities with RMB Australia. As at the date of this Prospectus, the debt position stands at $17.6 million comprising a $9.6 million project loan facility, a $4 million Corporate Loan Facility and a $4 million loan reflecting prepayment of a silver hedge position. The Company has received a credit approved offer letter from RMB Australia to increase the Corporate Loan Facility limit by an additional $13 million as summarised in section 5.3. While the preparation of definitive binding documentation of the facility increase is currently in progress, the Directors expect the facility to become available in late September 2011.

The Cash Flow Estimate assumes that the extended Corporate Loan Facility is drawn by an additional $9 million in late September 2011. Repayments in the Cash Flow Estimate are based on:

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project loan facility: quarterly payments of $2.4 million ending 30 June 2012;
Corporate Loan Facility: quarterly payments of $1.625 million from September 2012. The final repayment date is 30 June 2014, but accelerated repayment arrangements utilising 50% of excess cash flow project that Bass Metals will repay the facility by 30 June 2013;
silver hedge prepayment: quarterly repayment based upon silver hedge position settlements which have quarterly maturities until 30 June 2012.

Failure to enter into definitive binding documentation for the Company's increased Corporate Loan Facility or to meet the conditions precedent of that facility summarised in section 5.3, and the consequent inability to access the $13 million in additional funding will result in a material reduction to Bass Metals‟ cash position. Bass Metals is, however, confident of its ability to meet such conditions within the timeframes required.

Hedging

The current hedge position comprises:

10,439 tonnes of zinc at a forward price of A$2,460/tonne;
6,437 tonnes of lead at a forward price of A$2,410/tonne; and
451,000 ounces of silver at a forward price of A$26/ounce (which is reduced by an A$11/ounce prepayment).

The Cash Flow Estimate assumes quarterly settlement of these contracts marked to market against the Assumed Prices.

This hedge position covers approximately 32% of payable zinc, 33% of payable lead and 36% of payable silver production forecast to be produced from the Fossey Ore Reserve.

2.2.5 Sensitivity analysis

The Cash Flow Estimate is based on a number of economic and business assumptions about future events, as set out in section 2.2.4. It is therefore considered to be sensitive to different assumptions being made. In addition, the Cash Flow Estimate assumes the implementation of certain future business decisions and strategies that are subject to change, and assumes the success of those business decisions and strategies, which are subject to uncertainties and contingencies beyond the Company‟s control.

It is possible that more than one variable may move concurrently, giving rise to cumulative or offsetting effects, and so care should be taken in interpreting this information.

The investor should consider this analysis in conjunction with the risk factors set out in section 3.

Set out below is a summary of the sensitivity of the Cash Flow Estimate to changes in a number of key assumptions. It is noted that the change in the assumptions set out below is not meant to be indicative of the full range of variations that may occur. For the purposes of the analysis, the effect of the changes in key assumptions on the closing cash positions in the Cash Flow Estimate is presented in Table 7.

The following assumptions were varied:

Metal receipts: Down by 10%.

Mining costs: Up by 10%.

Milling costs: Up by 5%.

The outputs examined were closing cash position at each of 30 June 2012 and 30 June 2013. Note that no adjustments were made to discretionary expenditure areas such as exploration in response to adverse operational performance modelled by the sensitivity assumptions.

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Table 7: Sensitivity analysis

	Estimated Closing Cash 30 June 2012 A$millions	Estimated Closing Cash 30 June 2013 A$millions

Base case	18	32
Downside Sensitivity–cumulative basis
Metal receipts-10%	10	17
Mine costs +10%	7	14
Mill costs +5%	6	13
Base case with alternate:
Current metal/exchange rate	18	33
-20% movement to Assumed Prices	16	28

Note rounding errors will occur.

The results in Table 7 for varying revenue and costs indicate that internal factors such as negative variations to head grade or metallurgical recovery will have the greatest adverse effect on project performance.

As metal prices and exchange rates are a key external factor on metal receipts a further comparison was undertaken to examine the impact on closing cash of:

(a) utilising current prices (as set out in Table 4), or
(b) negative 20% movement from Assumed Prices.

The results presented in Table 7 are net of hedge settlements. Utilising current metal prices illustrates the positive impact of base metal hedging and the diverse metal revenue streams with higher precious metal prices balancing out lower base metal prices to maintain overall revenue at slightly above those in the Base Case. The negative 20% movement from Assumed Prices demonstrates the insulating effect of the A$ exchange rate to lower US$ denominated prices.

2.3 Use of proceeds of the Offer

The funds from this Offer and the increased Corporate Loan Facility are intended to be used to:

manage a short-term working capital requirement largely associated with the Hellyer Mine Project;
maintain an appropriate working capital position; and
provide adequate funding to sustain a large scale exploration and refractory gold recovery feasibility study program.

The following table shows the proposed application of funds for the receipt of the maximum subscription amount under the Prospectus of $10.7 million (before costs) or the minimum subscription amount of $8.0 million (before costs).

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Table 8: Application of funds

Activity Fossey East exploration drill drive Exploration Gold recovery project General working capital Costs associated with Offer Total	Minimum subscription amount $8.0 m ($m)	Maximum subscription amount $10.7 m ($m)
	0.8 3.7 1.0 1.9 0.6	0.8 6.3 1.0 1.9 0.7
	$8.0	$10.7

In the event that more than the minimum subscription amount of $8 million is raised but the Offer is not fully subscribed, then all of the additional funds are proposed to be applied toward exploration less the additional costs.

2.4 Effect on capital structure

The potential effect of the Offer on the capital structure of Bass Metals depends on:

(a) the level of take up of Entitlements by Eligible Shareholders under the Offer and any Shortfall by other investors;
(b) any new issues of Shares (for example pursuant to the exercise of any existing Options or to existing employees in accordance with the terms of their employment agreements with Bass Metals under Bass Metals‟ employee share loan scheme approved by Shareholders at the 30 November 2010 Annual General Meeting);
(c) the cancellation of any existing Options held by employees that lapse pursuant to the terms and conditions of the Bass Metals‟ employee share option plans (approved by Shareholders at the 27 November 2007 Annual General Meeting and the 30 November 2010 Annual General Meeting) under which they were issued; and
(d) the level of exercise of the New Options, which in turn is likely to depend on the market value of the Shares, particularly at the time leading up to the expiry date of the New Options, being 30 September 2014.

The effect of the Offer on the issued securities of Bass Metals is set out in the tables below.

Full raising of $10,670,000

The effect of the Offer raising $10,671,541 on Bass Metal‟s issued share capital will be as follows:

Table 9: Issued capital – full raising of $10,670,000

Ordinary Shares	Number
Before the Offer	213,430,823
Issue of Shares in repayment of Loan Notes (see section 5.4) if Shareholder approval is obtained on 26 September 2011	6,666,667
Issue of New Shares under the Offer	71,143,608
Total (post completion of the Offer)	291,241,098

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Options	Number
Unlisted Options exercisable at $0.275 on or before 22 December 2011	1,375,000
Unlisted Options exercisable at $0.375 on or before 31 December 2011*	225,000
Unlisted Options exercisable at $0.51 on or before 31 December 2012*	425,000
Unlisted Options exercisable at $0.375 on or before 2 November 2011*	250,000
Unlisted Options exercisable at $0.425 on or before 16 October 2012*	1,055,000
Unlisted Options exercisable at $0.25 on or before 1 September 2013*	400,000
Unlisted Options exercisable at $0.35 on or before 1 September 2013*	400,000
Unlisted Options exercisable at $0.50 on or before 1 September 2013	200,000
Unlisted Options exercisable at $0.26 on or before 31 December 2012	300,000
Unlisted Options exercisable at $0.285 on or before 31 December 2012	300,000
Unlisted Options exercisable at $0.305 on or before 31 December 2012	300,000
Unlisted Options exercisable at $0.30 on or before 31 December 2012	950,000
Unlisted Options exercisable at $0.228 on or before 22 September 2013	3,000,000
Unlisted Options exercisable at $0.22 on or before 5 July 2013*	1,090,000
Unlisted Options exercisable at $0.205 on or before 11 October 2014*	200,000
Unlisted Options exercisable at $0.29 on or before 11 October 2014*	200,000
Unlisted Options exercisable at $0.41 on or before 11 October 2014*	200,000
Unlisted Options exercisable at $0.435 on or before 31 January 2015	150,000
Unlisted Options exercisable at $0.61 on or before 31 January 2015	150,000
Unlisted Options exercisable at $0.88 on or before 31 January 2015	150,000
Unlisted Options exercisable at $0.26 on or before 27 August 2015	200,000
Unlisted Options exercisable at $0.365 on or before 27 August 2015	200,000
Unlisted Options exercisable at $0.525 on or before 27 August 2015	200,000
Unlisted Options exercisable at $0.318 on or before 27 May 2014	5,900,000
Issue of Options exercisable at $0.20 to Convertible Note holders (see section 5.4) if Shareholder approval is obtained on 26 September 2011	22,000,000
Issue of Options exercisable at $0.20 to Loan Note holders (see section 5.4) if Shareholder approval is obtained on 26 September 2011	6,666,667
Issue of Lender‟s Options to RMB Australia (see section 5.3.2) if Shareholder approval is obtained	86,700,000
Issue of New Options under the Offer	71,143,608
Issue of New Options to Lead Manager (see section 5.2)	3,557,180
Total (post completion of the Offer)	207,887,455

The terms of the Options indicated entitle the holder to an adjustment to the exercise price to take account of the Offer in accordance with the formula set out in ASX Listing Rule 6.22.2.

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Other securities	Number
Unlisted Convertible Notes	3,300,000

The above figures assume that no further Shares or Options are issued prior to the issue of New Shares and New Options under the Entitlement Offer.

Issued capital – diluted basis - full raising of $10,670,000

The effect of the Offer raising $10,671,541 on the issued share capital of Bass Metals on a diluted basis assuming that all of the New Options issued under the Offer, and the existing Options and Convertible Notes that have been granted at the date of this Prospectus, are exercised or converted.

Table 10: Issued capital – diluted basis - full raising of $10,670,000

	Shares (fully diluted basis)

Total ordinary shares (post completion of the Offer)	291,241,098
Total options exercised (post completion of the Offer)	207,887,455
Conversion of 3,300,000 Convertible Notes at a conversion price of $0.15 per Share	22,000,000
Total ordinary shares on a fully diluted basis (post completion of the Offer) assuming full raising of $10,670,000	521,128,553

Minimum raising of $8,000,000

The effect of the Offer raising $8,000,000 on Bass Metals‟ issued share capital will be as follows:

Table 11: Issued capital minimum raising of $8,000,000

Ordinary Shares	Number
Before the Offer	213,430,823
Issue of Shares in repayment of Loan Notes (see section 5.4) if Shareholder approval is obtained on 26 September 2011	6,666,667
Offer	53,333,333
Total (post completion of the Offer)	273,430,823

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Options	Number
Unlisted Options exercisable at $0.275 on or before 22 December 2011	1,375,000
Unlisted Options exercisable at $0.375 on or before 31 December 2011*	225,000
Unlisted Options exercisable at $0.51 on or before 31 December 2012*	425,000
Unlisted Options exercisable at $0.375 on or before 2 November 2011*	250,000
Unlisted Options exercisable at $0.425 on or before 16 October 2012*	1,055,000
Unlisted Options exercisable at $0.25 on or before 1 September 2013*	400,000
Unlisted Options exercisable at $0.35 on or before 1 September 2013*	400,000
Unlisted Options exercisable at $0.50 on or before 1 September 2013	200,000
Unlisted Options exercisable at $0.26 on or before 31 December 2012	300,000
Unlisted Options exercisable at $0.285 on or before 31 December 2012	300,000
Unlisted Options exercisable at $0.305 on or before 31 December 2012	300,000
Unlisted Options exercisable at $0.30 on or before 31 December 2012	950,000
Unlisted Options exercisable at $0.228 on or before 22 September 2013	3,000,000
Unlisted Options exercisable at $0.22 on or before 5 July 2013*	1,090,000
Unlisted Options exercisable at $0.205 on or before 11 October 2014*	200,000
Unlisted Options exercisable at $0.29 on or before 11 October 2014*	200,000
Unlisted Options exercisable at $0.41 on or before 11 October 2014*	200,000
Unlisted Options exercisable at $0.435 on or before 31 January 2015	150,000
Unlisted Options exercisable at $0.61 on or before 31 January 2015	150,000
Unlisted Options exercisable at $0.88 on or before 31 January 2015	150,000
Unlisted Options exercisable at $0.26 on or before 27 August 2015	200,000
Unlisted Options exercisable at $0.365 on or before 27 August 2015	200,000
Unlisted Options exercisable at $0.525 on or before 27 August 2015	200,000
Unlisted Options exercisable at $0.318 on or before 27 May 2014	5,900,000
Issue of Options exercisable at $0.20 to Convertible Note holders (see section 5.4) if Shareholder approval is obtained on 26 September 2011	22,000,000
Issue of Options exercisable at $0.20 to Loan Note holders (see section 5.4) if Shareholder approval is obtained on 26 September 2011	6,666,667
Issue of Lender Options to RMB Australia (see section 5.3.2) if Shareholder approval is obtained	86,700,000
Issue of New Options under the Offer	53,333,333
Issue of New Options to Lead Manager (see section 5.2)	2,666,667
Total (post completion of the Offer)	189,186,667

The terms of the Options indicated entitle the holder to an adjustment to the exercise price to take account of the Offer in accordance with the formula set out in ASX Listing Rule 6.22.2.

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Other securities	Number
Unlisted Convertible Notes	3,300,000

The above figures assume that no further Shares or Options are issued prior to the issue of New Shares and New Options under the Entitlement Offer.

Issued capital – diluted basis - minimum raising of $8,000,000

The effect of the Offer raising $8,000,000 on the issued share capital of Bass Metals on a diluted basis assuming that all of the New Options issued under the Offer, and the existing Options and Convertible Notes that have been granted at the date of this Prospectus, are exercised or converted.

Table 12: Issued capital – diluted basis - minimum raising of $8,000,000

	Shares (fully diluted basis)

Total ordinary shares (post completion of the Offer)	273,430,823
Total options exercised (post completion of the Offer)	189,186,667
Conversion of 3,300,000 Convertible Notes at a conversion price of $0.15 per Share	22,000,000
Total ordinary shares on a fully diluted basis (post completion of the Offer) assuming minimum raising of $8,000,000	484,617,490

2.5 Effect on debt facilities

Under the terms of the Corporate Loan Facility, the raising of $8 million of new equity is:

a condition precedent in respect of the drawdown of any amount in excess of the first $9 million (ie. in respect of any of the final $4 million of the $13 million increase); and
an undertaking binding on Bass Metals which must be satisfied by 31 October 2011. If the undertaking is not satisfied, this will constitute an event of default under the Corporate Loan Facility and the project loan facility, which will allow RMB Australia to accelerate the loans and require repayment of all other amounts owing to RMB Australia under the loan facilities and the hedging, and which will allow RMB Australia to enforce its security.

2.6 Future performance

The Board has given careful consideration to whether forecast financial information, other than the Cash Flow Estimate, can and should be included in this Prospectus. In particular, the Board has considered whether there is a reasonable basis for the preparation and disclosure in this Prospectus of reliable and useful forecasts of financial information, other than the Cash Flow Estimate. The Board has concluded that forecast financial information for Bass Metals, in addition to the Cash Flow Estimate, should not be provided in this Prospectus.

However, on the basis of the Cash Flow Estimate set out in section 2.2.3, and assuming that the full amount under the Corporate Loan Facility is drawn down by Bass Metals, the Directors consider that Bass Metals will have adequate cash available to meet its business objectives in FY2012 and FY2013 even if only the minimum subscription amount is raised under the Offer. The maximum subscription amount under the Offer has been targeted to enable a higher level of discretionary expenditure whilst maintaining a robust cash buffer.

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2.7 Impact of the Offer on earnings per Share in prior periods

On completion of the Offer, earnings per Share calculations for all prior periods will be adjusted to reflect the bonus element of the Entitlement Offer, as required by AASB 133 "Earnings per Share". Based on the Share price and Shares outstanding as at the date of this Prospectus, the reported earnings per Share in prior periods and the earnings per Share in prior periods restated for the bonus element of the Offer are shown in the tables below.

Table 13: Reported historical earnings per Share

Year ended 30 June	Basic earnings per share	Diluted earnings per share
2011	(7.49) cents	(7.09) cents
2010	(0.30) cents	(0.30) cents
2009	18.46 cents	17.32 cents

Table 14: Historical earnings per Share restated

Year ended 30 June	Basic earnings per share	Diluted earnings per share
2011	(7.49) cents	(5.19) cents
2010	(0.30) cents	(0.19) cents
2009	18.46 cents	10.53 cents

2.8 Effect for Shareholders

An Eligible Shareholder who takes up his or her full Entitlement and exercise all of his or her New Options will not have his or her holdings diluted. The holding of any Eligible Shareholder who does not take up all of their Entitlement will be diluted assuming other Shareholders do take up all of their Entitlement.

2.9 Effect on financial position

To illustrate the effect of the Offer on Bass Metals, the following pro-forma consolidated balance sheet of Bass Metals and its controlled entity taking into account the Offer has been prepared based on Bass Metals‟ unaudited consolidated balance sheet as at 30 June 2011.

The pro-forma consolidated balance sheet illustrates the effect of the Issue as if the Offer had occurred on 30 June 2011, either based upon minimum subscription ($8.0 million) or fully subscribed ($10.7 million), and net of the costs of the Issue. It also illustrates the effect of Bass Metals‟ Convertible Notes issue ($3.3 million). Further, this pro-forma balance sheet assumes that Shareholders approve the issue of Shares in repayment of Loan Notes issued to Director related entities on 26 September 2011, as detailed in section 5.4. The financial information is presented in an abbreviated form insofar as it does not include all of the disclosure applicable to annual financial reports prepared in accordance with the Corporations Act.

However, the accounting policies adopted in the preparation of the summary pro forma historical consolidated balance sheet are consistent with the accounting policies adopted and applied in the preparation of Bass Metals‟ unaudited consolidated balance sheet as at 30 June 2011.

Details of the costs of the Issue are shown in section 5.8.

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Table 15: Pro-forma consolidated balance sheet

Notes	*Minimum $8.0 million* *Maximum $10.7 million* Unaudited Pro-forma Pro-forma 30 June Pro-forma 30 June Pro-forma 30 June 2011 Adjustments 2011 Adjustments 2011 $'000 $'000 $'000 $'000 $'000
Current Assets Cash and cash equivalents 1 Trade and other receivables Inventories Other assets Total Current Assets Non-Current Assets Trade and other receivables Plant and equipment Mine properties Exploration and evaluation Other financial assets Deferred tax assets Total Non-Current Assets TOTAL ASSETS Current Liabilities Trade and other payables Borrowings 2 Derivative financial liabilities Provisions Contingent consideration Total Current Liabilities Non-Current Liabilities Borrowings Convertible notes 3 Provisions Contingent consideration Deferred tax liabilities Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS Equity Issued capital 4 Reserves Retained profits Cash consumed 5 TOTAL EQUITY	6,355 3,478 9,251 6,150 11,767 2,863 0 2,863 0 2,863 5,334 0 5,334 0 5,334 217 0 217 0 217
	14,769 3,478 17,665 6,150 20,181
	2,837 0 2,837 0 2,837 30,008 0 30,008 0 30,008 32,166 0 32,166 0 32,166 16,911 0 16,911 0 16,911 720 0 720 0 720 7,460 0 7,460 0 7,460
	90,102 0 90,102 0 90,102
	104,871 3,478 107,767 6,150 110,283
	10,446 0 10,446 0 10,446 14,821 0 14,821 0 14,821 1,204 0 1,204 0 1,204 168 0 168 0 168 943 0 943 0 943
	27,582 0 27,582 0 27,582
	2,585 0 2,585 0 2,585 0 3,300 3,300 3,300 3,300 5,007 0 5,007 0 5,007 2,755 0 2,755 0 2,755 10,654 0 10,654 0 10,654
	21,001 3,300 24,301 3,300 24,301
	48,583 3,300 51,883 3,300 51,883
	56,288 178 55,884 2,850 58,400
	50,358 9,000 58,776 11,672 61,292 1,501 0 1,501 0 1,501 4,429 0 4,429 0 4,429 0 (8,822) (8,822) (8,822) (8,822)
	56,288 178 55,884 2,850 58,400

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Minimum	$8.0 million	Maximum $10.7 million
*Note 1*
Cash at bank
Cash at bank 30 June 2011	6,355	6,355
Cash depleted in operations 1 July to 31 August 2011	(8,822)	(8,822)
Funds rasied from issue of Convertible Notes	3,300	3,300
Funds raised from issue of Loan Notes	1,000	1,000
Funds to be raised from the Issue	8,000	10,672
Estimated costs of the Issue	(582)	(738)
Closing pro-forma cash at bank	9,251	11,767
*Note 2*
Borrowings
Borrowings 30 June 2011	14,821	14,821
Issue of Loan Notes (see Section 5.4)	1,000	1,000
Repayment of Loan Notes (see Section 5.4)	(1,000)	(1,000)
Closing pro-forma borrowings	14,821	14,821
*Note 3*
Convertible notes
Convertible Notes 30 June 2011	0	0
Issue of Convertible Notes (see Section 5.4)	3,300	3,300
Closing pro-forma convertible notes	3,300	3,300
*Note 4*
Issued capital
Issued capital 30 June 2011	50,358	50,358
Issue of shares in repayment of Loan Notes (see Section 5.4)	1,000	1,000
Rights Issue	8,000	10,672
Estimated costs of the Issue	(582)	(738)
Closing pro-forma issued capital	58,776	61,292
*Note 5*
Cash consumed
Net cash consumed in operations 1 July to 31 August 2011	(8,822)	(8,822)

2.10 Dividends

The New Shares will rank equally in all respects (including dividend and bonus issues) with all existing Shares in the capital of Bass Metals from the date of issue. The Board is not able to indicate when and if dividends will be paid in the future, as payment of any dividend will depend on the future profitability, financial position and cash requirements of Bass Metals.

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3. RISK FACTORS

3.1 Introduction

There are a number of factors, both specific to Bass Metals and of a general nature, which may, either individually or in combination, have a material adverse effect on the Company's ability to effectively implement its strategy, its operating and financial performance and financial position, its prospects, its potential ability to pay dividends in the future and the value of the Shares and New Options.

By their nature, investments in mining ventures are subject to numerous risks. This section describes certain specific areas that are believed to be material risks associated with an investment in Bass Metals. This section does not, and does not purport to, contain an exhaustive list of the risks associated with an investment in New Shares or New Options.

3.2 Company specific risks

The following risks have been identified as being key risks specific to an investment in Bass Metals. These risks have the potential to have a significant adverse impact on Bass Metals and may affect Bass Metals‟ financial position, prospects and price and value of New Shares and New Options.

Exploration, development, mining and processing risks

The operations of Bass Metals in mineral exploration, project development and mining by its nature contain elements of significant risk. Ultimate and continuous success of these activities is dependent on many factors such as the discovery and/or acquisition of Mineral Resources, the degree of conversion to economically recoverable Ore Reserves, changes to Mineral Resource and Ore Reserve estimates as a result of the identification of new Resources and Reserves, the reclassification of Resources and Reserves, the depletion of Resources and Reserves by mining, increases and decreases to Ore Reserves as a result of changing costs and revenues, successful conclusions to feasibility studies, access to adequate capital for project development, design and construction of efficient mining and processing facilities within capital expenditure budgets, metallurgical recoveries, performance of extractive equipment and reagents, securing and maintaining title to tenements, obtaining consents and approvals necessary for the conduct of exploration and mining, and access to competent operational management and prudent financial administration, including the availability and reliability of appropriately skilled and experienced employees, contractors and consultants.

Whether or not income will result from the development of tenements depends on the successful establishment of mining operations. Factors including costs, actual mineralisation consistency and reliability of ore grades and commodity prices affect successful project development and mining operations.

Operating costs

Operating costs are estimated based on the interpretation of geological data, feasibility studies, anticipated climatic conditions and other factors. Any of the following events, among the other events and uncertainties described in this Prospectus, could affect the ultimate accuracy of such estimates and result in an increase in actual operating costs incurred:

unanticipated changes in grade and tonnage of ore to be mined and processed;
incorrect data on which engineering assumptions are made;
equipment delays;
labour negotiations; and
changes in government regulation (including regulations regarding prices, cost of consumables, royalties, duties, taxes, permitting and restrictions on production quotas on exploration of minerals).

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Production estimates

The Company may not achieve its production estimates. The failure of the Company to achieve its production estimates could have a material adverse effect on any or all of its future cash flows, profitability, results of operations and financial conditions. The realisation of production estimates is dependent on, among other things, the accuracy of Ore Reserve and Mineral Resource estimates, the accuracy of assumptions regarding ore grades and recovery rates, ground conditions (including hydrology), the physical characteristics of ores, the presence or absence of particular metallurgical characteristics, and the accuracy of the estimated rates and costs of mining, ore haulage and processing.

Actual production may vary from estimates for a variety of reasons, including: the availability of certain types of ores; the actual ore mined varying from estimates of grade or tonnage; dilution and metallurgical and other characteristics (whether based on representative samples of ore or not); short-term operating factors such as the need for sequential development of ore bodies and the processing of new or adjacent ore grades from those planned; mine failures or equipment failures; industrial accidents; natural phenomena such as inclement weather conditions, floods, droughts, rock slides and earthquakes; encountering unusual or unexpected geological conditions; changes in power costs and potential power shortages; shortages of key supplies needed for mining operations, including explosives, fuels, chemical reagents, water, equipment parts and lubricants; plant and equipment failure; the inability to process certain types of ores; labour shortages or strikes; lack of required labour; civil disobedience and protests; and restrictions or regulations imposed by government agencies or other changes in the regulatory environment.

Such occurrences could also result in damage to mineral properties or mines, interruptions in production, injury or death to persons, damage to property of Bass Metals or others, monetary losses and legal liabilities in addition to adversely affecting mineral production.

These factors may cause a mineral deposit that has been mined profitably in the past to become unprofitable forcing Bass Metals to cease production.

Water management - geotechnical risk

In early June 2011, Bass Metals experienced unexpectedly high water ingress to its underground mining operations that curtailed mine development to access new ore sources at its Hellyer Mine Project. Although Bass Metals has had independent geotechnical and hydrological advice and undertaken a number of measures to mitigate this risk, including procuring temporary pumping capacity and ordering higher capacity equipment for permanent installation, together with mine planning and operating procedures which seek to limit exposure to areas possibly prone to waterflow structures, Bass Metals cannot guarantee that this will not affect future production and performance.

Metallurgy

Metal and/or mineral recoveries are dependent upon the metallurgical processes and flowsheet used to recover the metals into a saleable form, and by its nature contain elements of significant risk which may adversely affect the economic viability of the project, such as:

adapting the Hellyer Mine Project process plant to treat Fossey Mine ore and produce saleable concentrates;
sufficient ore stockpiles to maintain the plant throughput at minimum levels to maintain a stable operating environment and to achieve the planned metallurgical performance;
plant stoppages due to mechanical failures which affect the stable operating environment and the planned metallurgical performance;
changes in mineralogy in the ore deposit can result in inconsistent metal recovery; and
changes in metallurgical performance can also result in changes to the grades and specifications of the concentrates that are produced which may breach the respective sales agreements and result in concentrate material either incurring additional penalties in the payment terms or becoming unsalable.

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RMB Australia finance facilities

Bass Metals has fully secured debt and hedging facilities with RMB Australia. As at the date of this Prospectus, the balance owing is $17.6 million, comprising a $9.6 million Project Loan, a $4 million Corporate Loan Facility and a $4 million loan reflecting prepayment of a silver hedge position. As summarised in section 5.3, Bass Metals has received a credit approved offer letter from RMB Australia to increase the Corporate Loan Facility limit by an additional $13 million. Preparation of definitive binding documentation of the facility increase is currently in progress and Bass Metals expects $9 million of the facility increase to become available in late September 2011.

There is a risk, however, that Bass Metals and RMB Australia will be unable to agree definitive binding documentation for the increased Corporate Loan Facility. There is also a risk that, even if that documentation is entered into, Bass Metals may fail to meet the conditions precedent of that facility summarised in section 5.3 and, consequently, be unable to access the $13 million in additional funding from the Corporate Loan Facility.

While Bass Metals is confident of being able to agree and enter into definitive documentation with RMB Australia and being able to meet such conditions to enable drawdown by late September 2011, if either of these do not occur, then Bass Metals will likely need to raise further funds either through debt or equity.

In these circumstances, any additional equity financing may be dilutive to Shareholders, may be undertaken at lower prices than the New Shares or may involve restrictive covenants which limit the Bass Metals‟ operations and business strategy. Although the Directors believe that additional capital can be obtained, no assurances can be made that appropriate capital or funding will be available on terms favourable to the Bass Metals or at all. If Bass Metals is unable to obtain additional financing as needed, it may be required to reduce, delay or suspend its operations and this could have a material adverse affect on Bass Metals‟ activities and could affect Bass Metals‟ ability to continue as a going concern.

In addition, if Bass Metals is not able to satisfy any of the conditions subsequent or undertakings applicable to the Corporate Loan Facility, this will give RMB Australia the right to withhold further drawdowns, to accelerate any outstanding loans or hedging and to enforce its security. The conditions subsequent and undertakings are summarised in more detail in section 5.3.

Reliance on key personnel

Bass Metals‟ success depends to a significant extent upon its key management personnel, as well as other management and technical personnel including sub-contractors.

Bass Metals has a small team and the loss of the services of any such personnel could have an adverse effect on Bass Metals at this stage of its development.

Insurance

Bass Metals currently maintains insurance coverage as determined appropriate by the Board and management, but no assurance can be given that Bass Metals will continue to be able to obtain such insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover all claims.

No geographical distribution

Bass Metals‟ projects are all located in Tasmania. Any circumstance or event which negatively impacts the ownership, development or operation of these projects in the state, could materially affect the financial performance of Bass Metals more significantly than if it had a diversified asset base.

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Negative publicity

Any negative publicity or announcement relating to Bass Metals, its projects, substantial shareholders or key personnel may adversely affect the stock performance of Bass Metals, whether or not this is justifiable. Examples of this negative publicity or announcement may include involvement in legal or insolvency proceedings, failed attempts in takeovers, joint ventures or other business transactions, operating activities, environmental management or social or community relations.

Conditions and termination of the Helmsec mandate letter

The mandate letter under which Helmsec is appointed as Lead Manager and to assist the Company place any Shortfall entitles Helmsec to terminate its appointment at any time on written notice in accordance with the mandate letter.

A summary of the mandate letter is set out in section 5.2.

Liquidity and volatility

Bass Metals is a small company in terms of market capitalisation. An investment in New Shares and New Options should be regarded as speculative. Bass Metals also has a relatively small Shareholder base. As a consequence there is a risk, particularly in times of share market turbulence or negative investor sentiment, that there will not be a highly liquid market for Shares and/or New Options or that the price of Shares or New Options may decrease considerably. There may be relatively few buyers or sellers of securities on ASX at any given time and the market price may by highly volatile. This may result in Shareholders wishing to sell their Shares at such a time receiving a market price for their Shares that is considerably less than the price paid under the Offer.

3.3 Industry specific risks

Potential investors should understand that all mineral exploration, development and mining activities are high-risk undertakings and there can be no assurance that any exploration or development activity in regard to Bass Metals‟ current properties, or any properties that may be acquired in the future, will result in the discovery or exploitation of an economic Mineral Resource.

Mineral exploration, development and mining may be hampered by circumstances beyond the control of Bass Metals and are speculative operations which by their nature are subject to a number of inherent risks, including the following:

Development of projects

The development of Bass Metals‟ projects will require substantial capital expenditure, experienced personnel and regulatory approvals. Further, there are a number of uncertainties inherent in the development and construction of any mining projects and processing facilities. These include:

timing and cost, which can be considerable, of the construction of mining and processing facilities;
availability and cost of skilled labour, power, water and transportation facilities;
need to obtain necessary environmental and other governmental permits and the timing of those permits;
need to consider and address landholder, native title, cultural heritage, environmental and community issues; and
unexpected technical, geographical or geological issues not readily apparent at the commencement of development.

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Exploration risks

Exploration is a high risk activity that requires large amounts of expenditure over extended periods of time. Bass Metals‟ exploration activities are subject to all the hazards and risks normally encountered in the exploration of minerals, including climatic conditions, hazards of operating vehicles and plant, risks associated with operating in remote areas and other similar considerations. Conclusions drawn during mineral exploration are subject to the uncertainties associated with all sampling techniques and to the risk of incorrect interpretation of geological, geochemical, geophysical, drilling and other data.

Further, the costs of Bass Metals‟ exploration activities may materially differ from its estimates and assumptions. No assurance can be given that Bass Metals‟ cost estimates and the underlying assumptions will be realised in practice, which may materially and adversely affect the value of Bass Metals‟ shares.

Mineral Resource and Ore Reserve estimates

Bass Metals‟ ore quantities and grades included in its Mineral Resource and Ore Reserve estimates are estimates and may not prove to be an accurate indication of the quantity or grade of the ore that Bass Metals has identified or that it will be able to extract.

Estimating the size and/or grade of a deposit depends on interpreting and extrapolating a limited amount of geological data, including drilling samples and assays. Many complex geological and metallurgical judgments are required in order to estimate Mineral Resources, including the interpretation of observable geological structures, the location, spacing, direction and depth of drill holes, the application of sampling techniques and the statistical controls to apply to the resulting data. As a result Mineral Resource estimates are inherently uncertain, and there can be no assurance they will not be subject to future downward revision.

In addition, you should be aware that the inclusion of material in a Mineral Resource estimate does not require a conclusion that the material may be economically extracted at the yield indicated or at all. You should not assume that Bass Metals‟ Mineral Resource estimates are capable of being directly reclassified as Ore Reserves under the JORC Code. Converting a Mineral Resource into an Ore Reserve requires additional judgments and assumptions, including estimates of mining techniques and costs, infrastructure and processing costs, metallurgical recoveries, transport costs, taxes and royalties and the price at which Bass Metals will be able to sell its production. Such estimates and judgments may prove to be inaccurate and are subject to changing circumstances. In addition, future changes in circumstances, such as increased costs, changes in taxes or regulations or lower commodity prices may alter the economic assumptions on which Bass Metals‟ Ore Reserve estimates are based, which may cause a downward revision.

Any material reductions in Bass Metals‟ estimates of Mineral Resources and Ore Reserves, or its ability to extract such Ore Reserves, could have a material adverse effect on Bass Metals‟ prospects, value, business, results of operations and financial condition. In addition, a reduction in Ore Reserves could impact depreciation and amortisation rates, asset-carrying values and provisions for closedown, restoration and environmental clean-up costs.

Commodity price fluctuations

In the event of exploration and development success, any future revenue derived through any future sales of valuable minerals exposes the potential income of Bass Metals to commodity price risks, subject to any commodity price hedging Bass Metals undertakes. Commodity prices fluctuate and are affected by numerous factors beyond the control of Bass Metals. These factors include world demand for commodities, forward selling by producers and the level of production costs in major commodity-producing regions. Moreover, commodity prices are also affected by macroeconomic factors such as expectations regarding inflation, interest rates and global and regional demand for, and supply of, commodities.

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Exchange rate fluctuations

International prices of most commodities are denominated in United States dollars, whereas the majority of the expenditure by Bass Metals will be in Australian currency, exposing Bass Metals to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar, subject to any currency hedging Bass Metals may undertake.

Environmental risks

The operations and proposed activities of Bass Metals are subject to State and Federal laws and regulations concerning the environment. As with most exploration projects and mining operations, Bass Metals‟ proposed activities are expected to have an impact on the environment, particularly as advanced exploration, mine development and mining activities proceed. Such impacts can give rise to substantial costs for environmental rehabilitation, damage, control and losses. Further, if there are environmental rehabilitation conditions attaching to the tenements of Bass Metals, failure to meet such conditions could lead to fines or even forfeiture of these tenements.

Bass Metals strives to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws. However, there is always a risk of environmental damage arising from Bass Metals‟ operations, including through accident, which may give rise to liabilities and costs for Bass Metals, including through the imposition of fines and the potential for operations to be delayed, suspended or shut down. There is a risk that environmental issues already exist in the areas where Bass Metals is exploring or operating that may give rise to liability for Bass Metals. There is also a risk that actions could be brought against Bass Metals alleging adverse effects on the environment in areas surrounding its sites.

Occupational health and safety risks

Bass Metals is committed to providing a healthy and safe environment for its personnel, contractors and visitors. Mining activities have inherent risks and hazards. Bass Metals provides appropriate instructions, equipment, preventative measures, first aid information and training to all stakeholders through its occupational, health and safety management systems.

Tenure and native title risks

Interests in exploration and mining tenements in Australia are governed by State legislation and are evidenced by the granting of leases or licences. Each lease or licence is for a specific term and carries with it annual expenditure and reporting conditions as well as other conditions requiring compliance. These conditions include the requirement, for exploration licences, for reduction in the area held under licence from time to time unless it is considered that special circumstances apply. Consequently, Bass Metals could lose title to, or its interest in, its mining tenements if licence conditions are not met or if expenditure commitments are not met.

The Native Title Act 1993 (Cth) recognises and protects the rights and interests in Australia of Aboriginal and Torres Strait Islander people in respect of land and waters, according to their traditional laws and customs. It is possible that, in relation to mining tenements in which Bass Metals has an interest or may acquire such an interest, there may be areas over which legitimate common law or statutory native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of Bass Metals to obtain the consent of any relevant land owner, or to progress from the exploration phase to the development and mining phases of the operation, may be adversely affected.

In addition, for mining tenements to be validly granted (or renewed) after 23 December 1996 the "future act regime" established by the Native Title Act 1993 (Cth) must be followed. This may involve complying with the potentially lengthy and expensive "right to negotiate" process under that Act. Therefore, native title considerations may impact on Bass Metals‟ operations and future plans. There are currently no areas of land in Tasmania which are subject to claims for native title under the Native Title Act 1993 (Cth).

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Licenses and permits

Many of the mineral rights, interests and agreements of Bass Metals are subject to government approvals, licenses and permits. In the event that Bass Metals breaches the conditions of its approvals, licences or permits, it may be subject to fines or penalties and mining, production and processing could be suspended by regulatory authorities. Such licenses and permits are subject to change in various circumstances. The granting, renewal and continued effectiveness of such approvals, licenses and permits are, as a practical matter, subject to the discretion of the applicable governments or governmental officials. There is a risk that Bass Metals will be unsuccessful in maintaining, or having renewed, any or all of the various approvals, agreements, licenses and permits in full force and effect without modification or revocation. To the extent such approvals are required and not obtained, Bass Metals may be curtailed or prohibited from continuing with its mining and processing operations, or proceeding with any future exploration or development of its tenements.

Joint venture partners and contractors

Bass Metals may rely significantly on strategic relationships with other entities and also on a good relationship with regulatory and government departments and other interest holders. Bass Metals may also rely on third parties to provide essential contracting services. There can be no assurance that its existing relationships will continue to be maintained or that new ones will be successfully formed. Bass Metals could be adversely affected by changes to such relationships or difficulties in forming new ones.

Competition

Bass Metals competes with other companies, including major mining companies in Australia and internationally. Some of these companies have greater financial and other resources than Bass Metals and, as a result, may be in a better position to compete for future business opportunities. There can be no assurance that Bass Metals can compete effectively with these companies.

Taxation

The Federal government has announced an intention to introduce a Minerals Resource Rent Tax applicable to profits on the production of iron ore and coal. The Federal government‟s proposal does not include tax on profits derived from minerals other than iron ore and coal, but as the taxation of mining profits may be the subject of a recently announced government review there can be no assurance given that Bass Metals will not in the future be subject to taxation levies additional to those to which all mining companies are currently subject (i.e. income tax and royalties).

There is a risk that any additional taxation of mining profits may affect the value of Bass Metals‟ mining exploration interests and the ability of Bass Metals to raise capital in the future.

Climate change

Mining of Mineral Resources is relatively energy intensive and depends on fossil fuels. Increased regulation of and government policy designed to mitigate, abate or adapt to climate change may adversely affect Bass Metals cost of operations and reduce profitability.

There is recent increased regulation and policy in Australia to promote reductions in greenhouse gas emissions, impose emission reduction targets and promote improvements in energy efficiency. This includes the National Greenhouse and Energy Reporting Act 2007 (Cth), the Energy Efficiency Opportunities Act 2006 (Cth), the Renewable Energy (Electricity) Act 2000 (Cth) and the proposed imposition by the Australian Government of a price on greenhouse gas emissions through a carbon tax from 1 July 2012 and subsequent cap-and-trade emissions trading scheme from 1 July 2015. Such regulatory policy change is likely to raise energy costs and costs of production for Bass Metals.

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3.4 General investment risks

The business activities of Bass Metals are subject to various general economic and investment risks that may impact on the future performance of the Company. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are outside the control of Bass Metals and cannot be mitigated. There are a number of general economic and investment risk factors that apply to companies generally and may include economic, financial, market or regulatory conditions. These risk factors include, but are not limited to:

General economic conditions

Economic conditions, both domestic and global, may affect the performance of Bass Metals. Factors such as fluctuations in currencies, commodity prices, inflation, interest rates, supply and demand and industrial disruption may have an impact on operating costs and share market prices. Bass Metals‟ future possible revenues and Share prices can be affected by these factors, all of which are beyond the control of Bass Metals or its Directors.

Rising energy and commodity costs

Bass Metals has significant commodity (diesel) and energy (gas and electricity) requirements and it relies on being able to fulfil those requirements at a cost which does not negatively impact on its cash flows. A number of factors (particularly the strength of the US dollar) may lead to an increase in commodity and energy costs, which may materially adversely affect the earnings of Bass Metals.

Equity market conditions

Securities listed on the stock market, and in particular securities of mining and exploration companies, can experience extreme price and volume fluctuations that are often unrelated to the operating performances of such companies. The market price of Shares may fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general.

General factors that may affect the market price of Shares include economic conditions in both Australia and internationally (particularly Australian, US and Chinese economic conditions), investor sentiment, local and international share market conditions, changes in interest rates and the rate of inflation, variations in commodity prices, the global security situation and the possibility of terrorist disturbances, changes to government regulation, policy or legislation, changes which may occur to the taxation of companies as a result of changes in Australian and foreign taxation laws, changes to the system of dividend imputation in Australia, and changes in exchange rates.

Changes in government policy and legislation

Any material adverse changes in relevant government policies or legislation of Australia may affect the viability and profitability of Bass Metals, and consequent returns to investors. The activities of Bass Metals are subject to various federal, state and local laws governing prospecting, development, production, taxes, labour standards and occupational health and safety, and other matters.

Future capital requirements

Bass Metals‟ ongoing activities may require substantial further financing in the future for its business activities, in addition to amounts raised pursuant to this Offer. Any additional equity financing may be dilutive to Shareholders, may be undertaken at lower prices than the New Shares or may involve restrictive covenants which limit Bass Metals‟ operations and business strategy.

Although the Directors believe that additional capital can be obtained, no assurances can be made that appropriate capital or funding, if and when needed, will be available on terms favourable to Bass Metals or at all. If Bass Metals is unable to obtain additional financing as needed, it may be required to reduce, delay or suspend its operations and this could have a material adverse affect on Bass Metals‟ activities and could affect Bass Metals‟ ability to continue as a going concern.

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Other

Other risk factors include those normally found in conducting business, including litigation resulting from the breach of agreements or in relation to employees (through personal injuries, industrial matters or otherwise) or any other cause, strikes, lockouts, loss of service of key management or operational personnel, non-insurable risks, delay in resumption of activities after reinstatement following the occurrence of an insurable risk and other matters that may interfere with the business or trade of Bass Metals.

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4. TERMS AND CONDITIONS OF NEW SHARES AND NEW OPTIONS

4.1 New Shares

New Shares will be fully paid ordinary shares in Bass Metals and will rank equally with the Shares already on issue.

The following is a broad summary (though not necessarily an exhaustive or definitive statement) of the rights and liabilities attaching to Shares. Full details of the rights and liabilities attaching to the Shares are contained in Bass Metals‟ constitution and in certain circumstances, are regulated by the Corporations Act, the ASX Listing Rules, the ASX Settlement Operating Rules and the common law. Bass Metals‟ constitution is available for inspection free of charge at Bass Metals‟ registered office and is available on Bass Metals‟ website at www.bassmetals.com.au.

(a) Voting rights: At a general meeting of Bass Metals, every holder of Shares present in person, by an attorney, representative or proxy has one vote on a show of hands, and, on a poll has one vote for every fully paid Share held, and, in respect of each partly paid Share, a fraction of a vote equal to the proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited). A poll may be demanded by the chairperson, by any five Shareholders having the right to vote at the meeting or by any one or more Shareholders who are together entitled to not less than 5% of the total voting rights of all the Shareholders having the right to vote on the resolution at the meeting.

Where there is an equality of votes the chairperson has, in addition to the vote or votes to which the chairperson may be entitled as a Shareholder, a casting vote. The chairperson has discretion both as to the use of the casting vote and as to the way in which it is used.

(b) General meetings: Notice of a meeting of Shareholders must be given to the Shareholders, the Directors, the Auditor, ASX and every person entitled to a Share in accordance with the constitution. The notice must state the general nature of business and any other matters required by the constitution, the Corporations Act or the ASX Listing Rules.
(c) Dividend rights: Subject to the rights or restrictions attached to a class of Shares and the Corporations Act and ASX Listing Rules, Bass Metals may pay dividends on Shares as the Directors resolve.

Subject to the Constitution, the Directors may pay or determine that a dividend is payable at a stated future time, subject to revocation up to the time fixed for payment but giving rise to a debt at that time.

Subject to the constitution, each Share of a class on which the Board resolves to pay a dividend carries the right to participate in the dividend, according to the proportion which the amount paid (or credited as paid) on the Share is to the total amount payable on the Share (but any amount paid during the period in respect of which a dividend is declared only entitles the Shareholder to an apportioned amount of that dividend as from the date of payment). Interest may not be paid by Bass Metals in respect of any dividend.

The Directors may direct payment of a dividend wholly or partly by the distribution of specific assets, including fully paid shares in, debentures of, or other securities of, Bass Metals or any other corporation.

The Directors may at their discretion and on such terms as they think fit establish: plans for cash dividends and interest paid by Bass Metals on unsecured notes or debenture stock issued by Bass Metals to be reinvested by way of subscription for shares in Bass Metals; and plans permitting holders of Shares, to the extent those Shares are fully paid up, to elect to forgo the right to share in dividends payable in respect of such Shares and to receive instead an issue of shares credited as fully paid up.

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(d) Rights on winding-up: If Bass Metals is wound up, the liquidator may, with the authority of a special resolution, divide the assets of Bass Metals amongst the Shareholders in kind and may, for that purpose, set the value of assets and determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

The liquidator may, with the authority of a special resolution, vest assets of Bass Metals in trustees on any trusts for the benefit of the Shareholders as the liquidator thinks appropriate, but so that no Shareholder is compelled to accept any marketable securities in respect of which there is any liability.

(e) Transfer of Shares: A Shareholder may transfer all or any of its Shares in any manner required or permitted by the constitution, the Corporations Act, the ASX Listing Rules and the ASX Settlement Operating Rules. The Directors may decline to register any transfer of Shares where permitted or required to do so by the ASX Listing Rules or the ASX Settlement Operating Rules.
(f) Issues of further shares: Share issues in Bass Metals are under the control of the Directors. The Directors may issue shares on such terms and with such rights or restrictions, and whether as preference shares, and grant any options or other securities with rights of conversion to shares or pre-emptive rights to any shares, as it thinks fit, subject to the constitution, the Corporations Act and the Listing Rules.
(g) Variation of rights: The rights attached to any class of Shares may not be varied or abrogated in any way without the consent in writing of the Shareholders holding threequarters of the Shares of that class, or by special resolution passed at a separate meeting of the holders of Shares of that class, any such variation to be subject to the Corporations Act.
(h) Constitution: The constitution of Bass Metals can be modified or repealed by way of a special resolution of Shareholders. A special resolution needs to be passed by at least 75% of the votes cast by Shareholders who are entitled to vote on the resolution.

4.2 New Options

The terms and conditions of the New Options are as follows:

(a) The New Options are exercisable at $0.20 each.
(b) A New Option must be exercised (if at all) not later than 30 September 2014.
(c) The New Options will become exercisable on issue.
(d) Each New Option entitles the holder to subscribe for and be allotted one Share in the capital of the Company upon exercise of the New Option and payment to Bass Metals of the exercise price.
(e) The exercise of some New Options only does not affect the holder‟s right to exercise other New Options at a later time.
(f) A New Option is exercisable by the holder lodging with the Bass Metals‟ secretary a notice of exercise, a cheque for the exercise price of each Share to be issued on the exercise of that New Option, and the New Option certificate.
(g) Bass Metals shall allot Shares on exercise of New Options in accordance with Bass Metals‟ constitution.
(h) Shares issued on the exercise of New Options will rank pari passu with all existing Shares in the capital of Bass Metals from the date of issue of those Shares.
(i) New Options are transferable.

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(j) In relation to new issues, there are no participating rights or entitlements inherent in the New Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the New Options.
(k) If from time to time, prior to the expiry of any New Options, the Company makes an issue of Shares to the holders of Shares in Bass Metals by way of capitalisation of profits or reserves ( bonus issue ), then upon exercise of a New Option a holder will be entitled to have issued to it (in addition to the Shares which it is otherwise entitled to have issued to it upon such exercise) the number of Shares which would have been issued to him or her under the bonus issue if on the date on which entitlements thereto were calculated he or she had been registered as the holder of the number of Shares which he or she would have been registered as holder of if immediately prior to that date he or she had duly exercised his or her New Options and the Shares the subject of such exercise had been duly allotted and issued to him or her. The bonus Shares will be paid by Bass Metals out of profits or reserves (as the case may be) in the same manner as was applied in relation to the bonus issue and upon issue rank pari passu in all respects with the other Shares allotted upon exercise of the New Options.
(l) In the event of any reorganisation (including consolidation, subdivision, reduction, cancellation or return) of the issued capital of Bass Metals before the expiry of any New Options, all rights of the option holder will be changed to the extent necessary to comply with the ASX Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

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5. ADDITIONAL INFORMATION

5.1 Nature of this Prospectus and continuous disclosure

This Prospectus is a prospectus to which the special content rules under section 713 of the Corporations Act apply. That provision allows the issue of a more concise document in relation to the offer of securities in classes that have been continuously quoted on ASX for the 3 months prior to the date of the Prospectus.

Bass Metals is a disclosing entity for the purposes of the Corporations Act and is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules, including the preparation of annual reports and half yearly reports.

In particular, Bass Metals is required to immediately notify ASX of information (subject to certain limited exceptions) of any information of which it is, or becomes, aware, which a reasonable person would expect to have a material effect on the price or value of its securities.

Full copies of all documents released to ASX under the continuous disclosure obligations of Bass Metals is available to the public from ASX's website www.asx.com.au, including the following documents notifying ASX of information relating to Bass Metals since the date of lodging the 2010 Annual Report and before the issue of this Prospectus:

Table 16: ASX announcements since the date of lodging the 2010 Annual Report

Date	Announcement
14/09/2011	Appendix 3B
12/09/2011	Additional Bank Facility and Rights Issue Fund Raising
09/09/2011	Positive Hellyer Operating and Exploration Developments
02/09/2011	Appendix 3B
31/08/2011	Update on Fundraising Activities
29/08/2011	Change of Registered Office
24/08/2011	Second Stage Financing Update
23/08/2011	Notice of General Meeting/Proxy Form
08/08/2011	Bass Metals Completes First Tranche of Fundraising
01/08/2011	June 2011 Quarterly Report of Activities and Cashflow
26/07/2011	High-Grade Intersection Confirms New McKay Discovery
20/07/2011	Presentation – Melbourne Mining Club Cutting Edge Series
20/07/2011	Bass to Rebuild Lost Value and Realise Growth Potential
20/07/2011	Operations and Exploration Update
13/07/2011	Suspension from Official Quotation
11/07/2011	Refinancing to Support Updated Mine Plan
11/07/2011	Trading Halt
05/07/2011	Bass Metals Reports High-Grade Start to Fossey East Drilling

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Date	Announcement
29/06/2011	Presentation – AMEC Convention
20/06/2011	Significant Improvement in Operational Performance
07/06/2011	Hellyer Mine – Operational Update
03/06/2011	Trading Halt
30/05/2011	Section 708A(5)(e) Notice
30/05/2011	Appendix 3B
24/05/2011	Presentation – Resources and Energy Symposium
20/05/2011	Results of General Meeting
12/05/2011	Company Presentation – New Information Update
27/04/2011	Section 708A(5)(e) Notice
27/04/2011	Appendix 3B
27/04/2011	March 2011 Quarterly Report of Activities and Cashflow
18/04/2011	Notice of General Meeting and Proxy Form
14/04/2011	Reinstatement to Official Quotation
14/04/2011	Placement
13/04/2011	Suspension from Official Quotation
11/04/2011	Trading Halt
08/04/2011	Appendix 3B
04/04/2011	Approved Offer for up to $7M Increase in Lending Facilities
23/03/2011	Presentation – Mines and Money 2011
17/03/2011	Half Year Results Show Transition to Large Scale Production
16/03/2011	31 December 2010 Half-Year Report
16/03/2011	Update – Positive Exploration Results at 3 Prospects
15/03/2011	Audio Broadcast
10/03/2011	Clarification Request from ASX
08/03/2011	Presentation – PDAC 2011
01/03/2011	Appendix 3B
28/02/2011	Fossey East Resource Estimate
11/02/2011	Appendix 3B
11/02/2011	Final Hellyer Concentrate Production Milestone Achieved
09/02/2011	Another Record at Fossey East- 9 metres at 35% Lead and Zinc

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Date	Announcement
03/02/2011	Audio Broadcast
02/02/2011	Hellyer Operations Update
28/01/2011	High-Grade Intercept Leads Latest Fossey East Drill Results
20/01/2011	December 2010 Quarterly Report of Activities and Cashflow
24/12/2010	Guidelines for Buying and Selling Securities
21/12/2010	Ore Intersected in Hellyer Mine Development
15/12/2010	Operations Update – BRR Interview
01/12/2010	Change of Director`s Interest Notice
01/12/2010	Appendix 3B
30/11/2010	Results of the Annual General Meeting
30/11/2010	2010 Annual General Meeting Presentation
30/11/2010	High Grade Intercept Extends Fossey East Discovery
29/11/2010	Trading Halt Request
29/11/2010	Trading Halt
26/11/2010	Change in Substantial Holder Notice from MFC
22/11/2010	Clarification Request from ASX
19/11/2010	Hellyer Project-Mine Life Increase
16/11/2010	Appendix 3B
15/11/2010	China International Lead and Zinc Conference 2010
15/11/2010	Becoming a substantial holder
11/11/2010	Response to ASX Price Query
05/11/2010	Section 708A(5)(e) Notice
05/11/2010	Appendix 3B
03/11/2010	Fossey Resource – High Grade Intercept
02/11/2010	Audio Broadcast and Presentation
29/10/2010	Notice of Annual General Meeting
29/10/2010	September 2010 Quarterly Report of Activities and Cashflow
28/10/2010	Presentation – Mining 2010 Resources Convention
28/10/2010	Bass Commences $1.7M Gold Processing Feasibility Study
28/10/2010	Share Placement to Raise $3.55 million
26/10/2010	Trading Halt

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Date	Announcement
21/10/2010	Research Report
20/10/2010	Bass Locks in Record High Silver Prices
13/10/2010	Operations Update and New Production Growth Initiative
11/10/2010	High Grade Drill Hit Confirms Fossey East Discovery
05/10/2010	New Mineralised Zone Discovered East of Fossey Mine
30/09/2010	Appendix 3B
29/09/2010	Audio Broadcast
29/09/2010	New High Grade Intercept Confirms Switchback Potential
28/09/2010	Project Finance Completion
27/09/2010	2010 Annual Report

Copies of documents lodged with ASIC in relation to Bass Metals may be obtained from, or inspected at, any office of ASIC.

Bass Metals will provide a copy of any of the following documents, free of charge, to any person who requests a copy prior to the Closing Date in relation to this Prospectus:

(a) the annual financial report lodged with ASIC for the year ended 30 June 2010;
(b) the half-year financial report lodged with ASIC by Bass Metals for the half-year ended 31 December 2010; and
(c) any other document used to notify ASX of information relating to Bass Metals under the continuous disclosure provisions of the Listing Rules and the Corporations Act after the date of lodgement with ASIC of the annual financial report referred to above and before lodgement with ASIC of this Prospectus.

All requests for copies of the above documents should be made by calling Bass Metals on +61 8 6315 1300 between 8.30 am and 5.00 pm (Perth time) Monday to Friday. The above information may also be obtained from Bass Metals' website at www.bassmetals.com.au.

As Bass Metals has been listed on ASX since 20 October 2005, a substantial amount of information concerning Bass Metals has previously been notified to ASX and is therefore publicly available.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to Bass Metals that has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Shareholders should, therefore, also have regard to the other publicly available information in relation to Bass Metals before making a decision whether or not to invest in the New Shares and New Options.

5.2 Appointment of Lead Manager

Bass Metals has entered into a mandate letter with the Lead Manager who has agreed to manage the Offer and attempt to place any Shortfall. The Lead Manager will receive a cash fee of 5.5% (plus GST) on all funds raised under the Entitlement Offer and any New Shares placed under the Shortfall and Helmsec (or its nominee) will receive options equivalent to 5% of the total number of New Shares issued under the Entitlement Offer and any New Shares placed under the Shortfall. These options will have identical terms to the New Options. The Lead Manager has received a retainer of $25,000 per month for a period of three months up to the end of September.

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The Lead Manager is entitled to terminate its appointment at any time on written notice in accordance with the mandate letter.

5.3 RMB Australia debt facilities

Bass Metals‟ current bank facilities with RMB Australia comprise: a project loan facility, a Corporate Loan Facility, a loan reflecting prepayment of a silver hedge position and a commodity/currency hedging facility.

5.3.1 Existing Facilities

Project loan facility – current balance owing is $9.6 million. The interest rate is 4.5% over the Base Rate and repayments comprise quarterly repayments of $2.4 million ending on the 30 June 2012. Bass Metals is also required to fund a debt service reserve account ( DSRA ) to the amount of the next quarterly repayment.

Corporate Loan Facility – current balance owing is $4.0 million. The interest rate is 5% over the Base Rate and repayment is due by 31 December 2012 with repayments due on 30 June 2012 ($1 million), 30 September 2012 ($1 million) and 31 December 2012 ($2 million).

Silver hedge prepayment loan – current balance owing is $4.0 million. There are no interest charges and quarterly repayments are based upon silver hedge position settlements which have quarterly maturities until 30 June 2012.

All of the facilities are covered by first ranking security comprising an all assets fixed and floating charge and a mining mortgage over key tenements granted by Bass Metals and its subsidiary, Hellyer Mill Operations Pty Ltd, in favour of RMB Australia.

Covenants and obligations are standard for a facility of this type and include, but are not limited to:

Bass Metals must not incur any financial indebtedness other than as permitted under the facility;
Bass Metals must not create or permit to exist any security interest over any of its assets other than as permitted under the facility;
Bass Metals must maintain a proceeds account into which all revenues from the project shall be paid and which sets out the application of proceeds to ensure expenditure is prioritised toward the cash generating assets and Bass Metals‟ debt repayment obligations ahead of any discretionary expenditure;
on each repayment date:
occurring on or before the project completion date, 75% of excess cashflow must be applied by Bass Metals as a mandatory prepayment; and
occurring after the project completion date, 50% of excess cashflow must be applied by Bass Metals as a mandatory prepayment; and
requirement that project cash flow forecasts maintain certain lending ratios as calculated by RMB Australia‟s financial models.

The facility contains events of default which are standard for a facility of this nature and include, without limitation, failure to pay, breach of obligations, cross default, material adverse effect, failure to achieve project completion, ceasing business, reorganisation, de-listing on ASX, winding up and insolvency. The occurrence of an event of default gives RMB Australia the ability to accelerate the facilities and enforce its securities.

Bass Metals is not in default with respect to these facilities.

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5.3.2 Extension of Corporate Loan Facility

Bass Metals has received a credit approved offer from RMB Australia to extend the Corporate Loan Facility, by increasing the limit by $13 million, from the existing $4 million to $17 million and the term to 30 June 2014. The purpose of the increased funding is to:

increase development expenditures at the Hellyer Mine Project;
meet the scheduled $2.4 million September 2011 quarterly debt repayment and funding of the DSRA; and
fund general working capital requirements.

Bass Metals is required to issue 86.7 million options to RMB Australia ( Lender’s Options ). The Lender‟s Options will have a term of three years from the date of issue and have a strike price that is the lesser of: (a) 20 cents per share and (b) a 20% premium to the price of the Offer Price. The issue of the Lender‟s Options is subject to shareholder approval being received prior to 31 October 2011. In the event that Shareholders do not approve the issue of the Lender Options then Bass Metals will issue RMB Australia 0.45 Bass Metals Shares for every one Lender‟s Option due but not approved, at no cost (being 39,015,000 Shares on the assumption that the $13 million is fully drawn). If the Shares to be issued in lieu of Lender‟s Options are not issued by 30 November 2011, that shall be an event of default under the Corporate Loan Facility and all amounts will become payable on demand.

The interest rate under the Corporate Loan Facility is 5% over the Base Rate. The principal will be repaid: (i) in quarterly instalments equal to the greater of $1.65 million and 50% of quarterly excess cashflow, for each quarter commencing 30 September 2012 until 30 June 2013; (ii) through a 50% cash sweep mechanism of quarterly excess cash flow for each subsequent quarter commencing on 30 September 2013 and on each quarterly date thereafter; (iii) from proceeds of the exercise of the Lender‟s Options (to be applied in prepayment in reverse order of maturity) and (iv) any outstanding amount on the final repayment date by a single bullet repayment.

The conditions precedent to initial drawdown of the first $9 million of the $13 million increase to the Corporate Loan Facility include, but are not limited to:

provision of executed loan and security documentation (registered as necessary);
compliance with certain lending ratios as calculated by RMB Australia‟s financial models;
technical and legal due diligence to the satisfaction of RMB Australia; and
all fees and any reimbursements payable to RMB Australia have been paid in full.

The conditions precedent to the subsequent drawdown of the remaining $4 million of the Corporate Loan Facility include, but are not limited to:

receipt by Bass Metals of binding commitments to raise at least $8 million of new equity;
compliance with certain lending ratios as calculated by RMB Australia‟s financial models; and
RMB Australia's satisfaction with the performance of the Hellyer Mine Project.

The conditions subsequent in respect of the Corporate Loan Facility include, but are not limited to, a requirement by Bass Metals to complete certain project related works such as installation of the upgraded dewatering system and ensuring that power supplies are sufficient to power all of the mine's underground requirements by no later than 31 October 2011.

The key covenant in respect of the Corporate Loan Facility is the requirement that Bass Metals must raise at least $8 million in equity by 31 October 2011.

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5.4 First Tranche Fundraising

In August 2011, Bass Metals completed a first tranche of its fundraising, raising a total of $4.3 million (before costs) through:

issue of $3.3 million of Convertible Notes to professional and sophisticated investors; and
issue of $1 million of Loan Notes, representing unsecured loans on commercial arm‟s length terms from Director related entities.

5.4.1 Convertible Notes

The 3.3 million Convertible Notes each have a face value of $1.00 per Convertible Note and are convertible into Shares at a conversion price of $0.15 per Share within 3 years of their date of issue. In total, and assuming no change to the conversion price, the 3.3 million Convertible Notes may be converted into 22 million Shares.

The Convertible Notes have the following key terms and conditions:

Each $1.00 Convertible Note is convertible at the election of the holder into Shares at a conversion price of $0.15 per Share (Conversion Price). If Bass Metals issues further convertible notes within 3 months from the date of issue of the Convertible Notes (Subsequent Notes) and the conversion price of any Subsequent Notes is less than $0.135, then the Conversion Price of the Convertible Notes will be reduced to match the conversion price of the Subsequent Notes. In this case, the Convertible Notes will convert into a greater number of Shares.
The Convertible Notes bear interest at the rate of 11% per annum payable quarterly in advance, which will be increased to match the rate applicable to the interest rate on any Subsequent Notes if the interest rate on Subsequent Notes is greater than 12.1%.
The Convertible Notes have a maturity date of 8 August 2014.
Unless converted or redeemed before the maturity date, the Convertible Notes must be redeemed in full on the maturity date.
At any time after 8 February 2013, Bass Metals has the right to redeem in full the outstanding Convertible Notes at a redemption price representing 120% of the outstanding principal amount (plus accrued but unpaid interest). The Convertible Note holders will have the opportunity to elect to convert any or all of the outstanding Convertible Notes in the event that Bass Metals exercises this early redemption option.
The Convertible Notes have been granted a second ranking security via a subordination agreement approved by RMB Australia. However, this security will automatically terminate on Bass Metals having raised a further $20 million in aggregate through subsequent fundraising by 8 November 2011.

Bass Metals has undertaken to issue to the Convertible Note holders, subject to Shareholder approval (which is to be sought at Bass Metals‟ upcoming general meeting of Shareholders on 26 September 2011), 22 million free attaching Options on the basis of 1 Option for each Share which would be issued to the Convertible Note holders if they converted all their Convertible Notes. The Options are to have an exercise price of $0.20 and expire three years from the date of issue. If Shareholder approval is not forthcoming, then a cash fee equivalent to 20% of the total face value of the Convertible Notes, being $660,000 in aggregate, will be payable to the Convertible Note holders by Bass Metals within 10 business days after 31 October 2011.

Bass Metals will announce the outcome of the 26 September 2011 general meeting of Shareholders, and its impact on the Convertible Notes, to ASX following that meeting.

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5.4.2 Loan Notes

The 1 million Loan Notes from Director related entities each have a face value of $1.00 per Loan Note and, subject to Shareholder approval, will automatically convert into Shares at a conversion price of $0.15 per Share. In aggregate, the 1 million Loan Notes may convert into 6,666,667 Shares.

The Loan Notes have the following key terms and conditions:

Each $1.00 Loan Note will automatically convert into 6.6667 Shares, subject to Shareholder approval, at a conversion price of $0.15 per Share.
The Loan Notes bear interest at the average bid rate for bills having a tenor of 90 days as displayed on the “BBSY” page of the Reuters Monitor System on the first day of that interest period plus 5% per annum.
The Loan Notes have a maturity date of 30 June 2013.
If shareholder approval is obtained for conversion of the Loan Notes, the total value outstanding of the loans will automatically convert into Shares 5 business days after Shareholder approval is granted. The Loan Notes will not convert into Shares at any other time.
If shareholder approval is not obtained for conversion of the Loan Notes, the Loan Notes will remain unsecured loans, interest bearing and repayable by 30 June 2013, unless Bass Metals determines to pay them out earlier.
Bass Metals may repay the Loan Notes at any time prior to maturity subject to the subordination conditions with the secured lender.
The Loan Notes are unsecured.

Details of the interests of Directors‟ in the Loan Notes is set out in section 5.5.

As part of the consideration for the issue of the Loan Notes, and consistent with the terms applicable to the Convertible Notes, Bass Metals has undertaken to issue to the Director related Loan Note holders, subject to Shareholder approval, 6,666,667 free attaching Options on the basis of 6.667 Options for each Loan Note. The Options have the same terms and conditions as the Options to be issued to Convertible Note holders described in section 5.4.1, being Options with an exercise price of $0.20 per Option and an expiry date of three years from the date of issue. If Shareholder approval is not forthcoming, then a cash fee equivalent to 20% of the total face value of the Loan Notes, being $200,000, will be payable to the Loan Note holders by Bass Metals within 10 business days after 31 October 2011.

Bass Metals will announce the outcome of the 26 September 2011 general meeting of Shareholders, and its impact on the Loan Notes, to ASX following that meeting. The Shares issued on conversion of the Loan Notes will not be entitled to participate in the Entitlement Offer as they will be issued (if at all) after the Record Date.

Details of the substituted interests of Directors which may arise upon Shareholder approval of the conversion of Loan Notes and issue of Shares and/or the additional interests of Directors which may arise upon Shareholder approval of the issue of Options are set out in section 5.5.

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5.5 Interests of Directors

Other than as set out in this Prospectus, no Director or proposed Director of Bass Metals holds, at the time of lodgement of this Prospectus with ASIC, or has held in the two years prior to that date, an interest in:

(a) the formation or promotion of Bass Metals;
(b) the Offer; or
(c) any property acquired or proposed to be acquired by Bass Metals in connection with its formation or promotion or in connection with the Offer,

other than in their capacity as a Shareholder. Except as set out in this Prospectus, no one has paid or agreed to pay any amount, and no one has given or agreed to give any benefit, to any Director or proposed director of Bass Metals to induce them to become, or to qualify them as, a Director or for services rendered by them in connection with the formation or promotion of Bass Metals or in connection with the Issue.

As at the date of this Prospectus, the Directors directly or indirectly hold the following interests in Shares and Options:

Table 17: Directors’ direct and indirect interests in Shares and Options

Director	Shares	Options
Don Boyer Michael Rosenstreich Craig McGown Tony Treasure	1,622,336 1,887,307 1,652,346 26,413,445*	600,000 1,750,000 475,000 250,000*

These Shares and Options are held by Metals Finance Limited. Mr. Treasure, Non-Executive Director of Bass Metals, is the Managing Director and a shareholder in Metals Finance Limited and the Metals Finance Limited nominee on the Board of Bass Metals.

Each Director who is an Eligible Shareholder will be entitled to participate in the Offer to the extent that the Director holds Shares as at the Record Date.

As at the date of this Prospectus, the Directors directly or indirectly hold interests in Loan Notes. Loan Notes are convertible into Shares, subject to Shareholder approval (which is to be sought at the Company's upcoming general meeting of Shareholders on 26 September 2011). These interests are shown in the table below.

As part of the consideration for the issue of the Loan Notes, and consistent with the terms applicable to the Convertible Notes, Bass Metals has undertaken to issue to the Director related Loan Note holders, subject to Shareholder approval (which is to be sought at Bass Metals‟ upcoming general meeting of Shareholders on 26 September 2011), 6,666,667 free attaching Options on the basis of 6.667 Options for each Loan Note. The Directors' entitlement to these Options, should Shareholders approve their issue, are shown in the table below.

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Table 18: Directors’ interests – Loan Notes

Director	Loan Notes	Shares*	Options*
Don Boyer Michael Rosenstreich Craig McGown Tony Treasure	250,000 - 250,000 500,000	1,666,667 - 1,666,667 3,333,333	1,666,667 - 1,666,667 3,333,333

subject to Shareholder approval, as detailed in section 5.4

5.6 Directors' remuneration

As remuneration for services as a Director, each non-executive Director is paid an amount determined by the Directors as a whole. The non-executive Directors' aggregate fees are within the maximum aggregate limited approved by shareholders, which is currently $350,000 per annum.

The remuneration of the Managing Director, Mr Michael Rosenstreich, is fixed by the Board and may consist of salary, bonuses or any other elements, but must not be a commission on, or percentage of, profits or other operating revenue.

Bass Metals has agreements with each of the Directors indemnifying them against liabilities incurred as a Director, to the extent permitted by law.

5.7 Interests of other persons

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus, and no promoter of Bass Metals holds, or held at any time during the last 2 years before the date of this Prospectus, any interest in:

(a) the formation or promotion of Bass Metals;
(b) any property acquired or proposed to be acquired by Bass Metals in connection with its formation or promotion or in connection with the Issue, or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefit has been given or agreed to be given to any of these persons for services rendered by them in connection with the formation or promotion of Bass Metals or in connection with the Offer.

Blake Dawson has acted as Australian legal adviser to Bass Metals in connection with the Offer. In aggregate, Bass Metals has paid or agreed to pay Blake Dawson approximately $60,000 (excluding disbursements and GST) for these services to the date of the Prospectus. Further amounts may be paid to Blake Dawson in accordance with its normal time-based charges.

Helmsec, has acted as lead manager in connection with the Offer and has agreed to attempt to place any Shortfall. Bass Metals has agreed to pay the Lead Manager a cash fee of 5.5% (plus GST) on all funds raised under the Entitlement Offer and New Shares placed under the Shortfall and will grant that number of options to Helmsec equivalent to 5% of the total number of New Shares issued under the Entitlement Offer and New Shares placed under the Shortfall.

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5.8 Costs of the Issue

The total costs of the Offer payable by Bass Metals, assuming the maximum subscription amount is raised, are estimated as follows:

Table 19: Costs of the Offer

able 19: Costs of the Offer
ASIClodgementfee	$2,137
ASXquotation fee	$38,300
Legal,financialand corporatefees and expenses	$91,500
Share Registry fees, printing, mailing, advertising, miscellaneous	$19,305
Fees payable toLeadManager	$587,000
Total	$738,242

5.9 Competent Persons statements

The information in this Prospectus that relates to exploration results is based on information compiled by Mr Kim Denwer who is a full time employee of Bass Metals. Mr Denwer is a Member of the Australian Institute of Geoscientists. Mr Denwer has sufficient experience relevant to the styles of mineralisation and types of deposits under consideration and to the activities currently being undertaken to qualify as a Competent Person as defined in the JORC Code. Mr Denwer consents to the inclusion in this Prospectus of this information in the form and context in which it appears.

The information in this Prospectus that relates to the Fossey Mineral Resource estimate is based on information compiled by Mr Kim Denwer who is a full time employee of Bass Metals. Mr Denwer is a Member of the Australian Institute of Geoscientists. Mr Denwer has sufficient experience which is relevant to the style of mineralisation and type of deposit and to the activities currently being undertaken to qualify as a Competent Person as defined in the JORC Code. Mr Denwer consents to the inclusion in this Prospectus of this information in the form and context in which it appears.

The information in this Prospectus that relates to the Fossey Ore Reserve estimate is based on information compiled by Mr Victor Rajasooriar who is a full time employee of Bass Metals. Mr Rajasooriar is a Member of the Australian Institute of Mining and Metallurgy. Mr Rajasooriar has sufficient experience which is relevant to the style of mineralisation and type of deposit and to the activities currently being undertaken to qualify as a Competent Person as defined in the JORC Code. Mr Rajasooriar consents to the inclusion in this Prospectus of this information in the form and context in which it appears.

5.10 Consents

Each of the parties named below as consenting parties:

(a) has given and has not, before lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named;
(b) does not make, or purport to make, any statement in this Prospectus or any statement on which a statement made in this Prospectus is based; and
(c) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any statements in or omissions from this Prospectus.

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Role	Consenting parties
Australian legal adviser Lead Manager to the Offer Share Registry Competent Persons	Blake Dawson Helmsec Global Capital Limited Computershare Investor Services Pty Ltd Mr Kim Denwer and Mr Victor Rajasooriar

5.11 Privacy

As a Shareholder, Bass Metals and the Share Registry have already collected certain personal information from you. If you apply for New Shares, Bass Metals and the Share Registry may update that personal information or collect additional personal information. Such information will be used to assess your Application, service your needs as a Shareholder, provide facilities and services that you request and carry out appropriate administration.

Company and tax law requires some of the information to be collected. If you do not provide the information requested, your Application may not be able to be processed efficiently, if at all.

Bass Metals and the Share Registry may disclose your personal information for purposes related to your shareholding to their agents and service providers, including those listed below or otherwise under the Privacy Act:

(a) the Share Registry for administration of the Entitlement Offer and ongoing administration of Bass Metals' share register; and
(b) printers and mailing houses for the purposes of preparation and distribution of securityholder statements and for handling of mail.

Under the Privacy Act, you may request access to your personal information held by (or on behalf of) Bass Metals or the Share Registry. You can request access to your personal information by contacting the Share Registry as follows:

Computershare Investor Services Pty Limited Level 2, 45 St Georges Terrace Perth Western Australia 6000

Phone: 1300 850 505

5.12 Directors’ consents

Each Director has given, and has not withdrawn, his consent to the issue of this Prospectus and to its lodgement with ASIC.

5.13 Governing law

This Prospectus, the Offer and the contracts formed on acceptance of Applications are governed by the laws applicable in Western Australia, Australia. Each applicant for New Shares submits to the non-exclusive jurisdiction of the courts of Western Australia, Australia.

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6. GLOSSARY OF TERMS

Additional New Shares and New New Shares and New options applied for by an Eligible Options or Additional Securities Shareholder in excess of his or her Entitlement in accordance with section 1.8.

Applicant Persons who submit a valid Entitlement and Acceptance Form pursuant to this Prospectus. Application An application for New Shares and New Options pursuant to the Offer made in accordance with this Prospectus and the Entitlement and Acceptance Form. Application Monies Monies received from Applicants in respect of their Applications. ASIC Australian Securities and Investments Commission. Assumed Prices The metal price and exchange rate assumptions underlying the Cash Flow Estimate, as set out in section 2.2.4. ASX Settlement ASX Settlement Pty Limited ABN 49 008 504 532. ASX ASX Limited ABN 98 008 624 691 and, where the context requires, the market operated by ASX. ASX Listing Rules The official listing rules of ASX.

ASX Settlement Operating The operating rules of ASX Settlement and to the extent that Rules they are applicable, the operating rules of each of ASX and ASX Clear Pty Limited ABN 48 001 314 503. Base Rate The average bid rate displayed at or about 10:30am on the rate set date on the Reuters screen BBSW page for a term equivalent to the relevant interest period. Board or Board of Directors The board of directors of Bass Metals. Business Day Has the meaning given in the ASX Listing Rules. Cash Flow Estimate Has the meaning given in section 2.2.3. CHESS Clearing House Electronic Subregister System. Closing Date 5.00 pm (Perth time) on 18 October 2011 (or as varied). Company or Bass Metals Bass Metals Ltd ABN 31 109 933 995. Competent Person Has the meaning given in the JORC Code. Conversion Price Has the meaning given to that term in section 5.4. Convertible Notes Convertible notes issued by Bass Metals on 8 August 2011, as described in section 5.4. Corporate Loan Facility Bass Metals‟ corporate loan facility provided by RMB Australia, which is described in section 5.3. Corporations Act Corporations Act 2001 (Cth), as amended. Director(s) A director of Bass Metals.

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DSRA

Debt service reserve account.

Eligible Shareholder(s)	A person who is an Eligible Shareholder as described in
	section 1.5 of this Prospectus.
Entitlement	The entitlement of a Shareholder to one New Share for
	every three Shares held as at 5.00 pm (Perth time) on 23
	September 2011 by that Shareholder together with one free
	attaching New Option for every one New Share issued.
Entitlement and Acceptance	The entitlement and acceptance form that accompanies this
Form	Prospectus, under which an Eligible Shareholder may apply
	for New Shares and New Options under the Entitlement
	Offer.
Fossey Mine	Bass Metals‟ underground mine at the Hellyer Mine Project.
FY	Financial year ending 30 June.
Hellyer Mine Project	Bass Metals‟ mining and processing operation in Tasmania,
	Australia.
Hellyer Tailings Storage Facility	Bass Metals‟ tailings storage facility at the Hellyer Mine
	Project.
Indicated Mineral Resourceor	That part of a Mineral Resource for which tonnage,
Indicated Resource	densities, shape, physical characteristics, grade and mineral
	content can be estimated with a reasonable level of
	confidence. It is based on exploration, sampling and testing
	information gathered through appropriate techniques from
	locations such as outcrops, trenches, pits, workings and drill
	holes. The locations are too widely or inappropriately spaced
	to confirm geological and/or grade continuity but are spaced
	closely enough for continuity to be assumed.
Inferred Mineral Resourceor	That part of a Mineral Resource for which tonnage, grade
Inferred Resource	and mineral content can be estimated with a low level of
	confidence. It is inferred from geological evidence and
	assumed but not verified geological and/or grade continuity.
	It is based on information gathered through appropriate
	techniques from locations such as outcrops, trenches, pits,
	workings and drill holes which may be limited or of uncertain
	quality and reliability.
JORC Code	The code prepared by the Australasian Joint Ore Reserves
	Committee in late 2004, which defines criteria for public
	reporting of mineral resources and reserves.
Lead ManagerorHelmsec	Helmsec Global Capital Limited ABN 77 129 825 798.
Lender’s Options	The Options to be issued to RMB Australia as consideration
	for the extension of the Corporate Loan Facility, as
	described in section 5.3.2.
Loan Notes	Loan notes issued by Bass Metals in August 2011, as
	described in section 5.4.2.
Measured Mineral Resourceor	That part of a Mineral Resource for which tonnage,
Measured Resource	densities, shape, physical characteristics, grade and mineral
	content can be estimated with a high level of confidence. It is

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based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.

Mineral Resource

New Options

New Shares

A concentration or occurrence of material of intrinsic economic interest in or on the Earth‟s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

The Options to be offered under the Entitlement Offer, each of which is an option to acquire a Share at an exercise price of $0.20 exercisable on or before 30 September 2014 subject to the terms and conditions in section 4.2.

Shares offered under this Prospectus to Eligible Shareholders on the basis of one New Share for every three Shares held on the Record Date at an issue price of $0.15 per New Share.

Offer or Entitlement Offer

The non-underwritten non-renounceable entitlement offer of New Shares and New Options offered under this Prospectus to Eligible Shareholders on the basis of one New Share for every three Shares held on the Record Date at an issue price of $0.15 per New Share together with one free attaching New Option for every one New Share issued.

Offer Price $0.15 per New Share. Opening Date 29 September 2011. Privacy Act The Privacy Act 1998 (Cth), as amended. Probable Ore Reserve or The economically mineable part of an Indicated, and in Probable Reserve some circumstances, a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Prospectus This prospectus dated 15 September 2011.

Proved Ore Reserve or Proved Reserve or Ore Reserve

The economically mineable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that

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extraction could reasonably be justified.

Record Date

RMB Australia

Shareholders Share Registry Share(s)

Shortfall

US Persons

US Securities Act

Valid Application

5.00 pm (Perth time) on 23 September 2011, being the time and date for determination of Entitlements of Shareholders to participate in the Offer.

RMB Australia Holdings Ltd ACN 003 201 214.

Holders of Shares in Bass Metals.

Computershare Investor Services Pty Limited.

A fully paid ordinary share in Bass Metals.

New Shares and New Options not taken up by Eligible Shareholders under their Entitlements.

United States of America, its territories and possessions, any state of the United States and the District of Columbia.

Has the meaning given in Rule 902(k) under Regulation S under the US Securities Act.

The Securities Act of 1933 (US), as amended.

An application for New Shares and New Options pursuant to the Offer made in accordance with this Prospectus and the Entitlement and Acceptance Form.

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CORPORATE DIRECTORY

Directors

Don Boyer, Non-Executive Chairman Michael Rosenstreich, Managing Director Craig McGown, Non-Executive Director Tony Treasure, Non-Executive Director

Registered Office

Level 1, 91 Havelock Street West Perth WA 6005

Phone: +61 8 6315 1300 Fax: +61 8 9481 2846 Website: www.bassmetals.com.au

Company Secretary Susan Hunter

Lead Manager

Helmsec Global Capital Limited Level 17 15 Castlereagh Street Sydney NSW 2000

Share Registry

Computershare Investor Services Pty Limited Level 2, 45 St George's Terrace Perth WA 6000

Legal adviser to the Offer Blake Dawson Level 32, Exchange Plaza 2 The Esplanade Perth WA 6000

Phone: 1300 850 505

AI assistant

GREENWING RESOURCES LTD — Capital/Financing Update 2011

65029_rns_2011-09-14_5441a6b4-5143-44db-b268-8f2dcbcaedae.pdf

Prospectus

THIS PROSPECTUS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION.

IMPORTANT NOTICE

Important document

Disclaimer

Future performance and forward looking statements

Restrictions on the distribution of this Prospectus

Defined terms and abbreviations

Prospectus availability

Australia and New Zealand

Foreign jurisdictions

Application for New Shares and New Options

Financial amounts

Privacy

KEY INVESTMENT ASPECTS

KEY DATES

CONTENTS

LETTER FROM THE CHAIRMAN

LETTER FROM THE CHAIRMAN

15 September 2011

Dear Shareholder

1. DETAILS OF THE OFFER

1.1 Structure of the Offer

1.2 Minimum subscription amount to be raised

1.3 Investment highlights

1.4 Summary of key risks

1.5 Eligible Shareholders

1.6 Ineligible Shareholders

1.7 How to apply for New Shares and New Options under the Offer

1.8 Applying for New Shares and New Options in excess of your Entitlement

1.9 What to do if you do not wish to accept any of your Entitlement

1.10 Shortfall

1.11 Representations by acceptance

1.12 New Zealand Shareholders

1.13

US representations

1.14 Rights and liabilities attaching to New Shares and New Options

1.15 Issue of New Shares

1.16 ASX quotation

1.17 Application Monies and interest

1.18 Risk factors

1.19 Taxation implications

1.20 Market prices of existing Shares on ASX

1.21 Enquiries

2. PURPOSE AND EFFECT OF THE OFFER ON THE COMPANY

2.1 Purpose of the Offer

2.2 Operational background and key technical issues relating to the Offer

2.2.1 Revised Fossey Mine plan

Resource model

Table 1: Fossey Mineral Resource estimate as at 30 June 2011 (at a 5% lead+zinc cut-off)

Revised Ore Reserve

Table 2: Fossey Ore Reserve estimate as at 30 June 2011 (at a 5% lead+zinc cut-off)

Table 3: Mine to mill (Actual) comparison

2.2.2. Hellyer processing operation

Table 4: Mill production

2.2.3 Cash Flow Estimate

2.2.4 Bass Metals’ best estimate assumptions underlying the Cash Flow Estimate

General assumptions

Metal prices and sales of concentrate

Production rates

Operating costs

Upgrade of mine dewatering system and ancillary services

Selling costs

Corporate debt position

Hedging

2.2.5 Sensitivity analysis

Table 7: Sensitivity analysis

2.3 Use of proceeds of the Offer

Table 8: Application of funds

2.4 Effect on capital structure

Full raising of $10,670,000

Table 9: Issued capital – full raising of $10,670,000

Issued capital – diluted basis - full raising of $10,670,000

Table 10: Issued capital – diluted basis - full raising of $10,670,000

Minimum raising of $8,000,000

Table 11: Issued capital minimum raising of $8,000,000

Issued capital – diluted basis - minimum raising of $8,000,000

GREENWING RESOURCES LTD Capital/Financing Update 2011