GREENWING RESOURCES LTD — Interim / Quarterly Report 2006

Oct 30, 2006

BASS METALS LTD ABN 31 109 933 995

31 October 2006

The Manager Companies Company Announcements Australian Stock Exchange 20 Bridge St Sydney NSW 2000

Dear Sir

SEPTEMBER 2006 QUARTERLY REPORT OF ACTIVITIES & CASHFLOW

Bass Metals Ltd is pleased to provide its activities report for the Quarter ending 30 September 2006

HIGHLIGHTS

Que River Base Metals Project

• Further shallow high grade Pb-Zn-Ag-Au results from 28 drill holes completed at Que River, within the target areas of the proposed stage 1 mining operation.
• New high grade remnant resource target identified at PQ South which is characterised by very high grades and true widths such as:
• ← 13 metres at 26% Zn, 13% Pb, 12 oz./t Ag & 8.1 g/t Au
• ← 15.7 metres at 20% Zn, 12% Pb, 10 oz./t Ag & 7.9 g/t Au
• ← 14.2 metres at 19% Zn, 11% Pb, 10 oz./t Ag & 6.8 g/t Au
• Ore processing agreements under negotiation with the Company aiming to secure terms which maximise return from the high gold values emerging in PQ Central and PQ South.

Mt Charter Gold-Silver project

• Second drill programme comprising 20 drill holes was completed during the Quarter.
• Drill results support interpretation of shallow wide gold-silver + zinc mineralisation. including:
• $\checkmark$ 34.2 metres at 1.4 g/t Au, 27 g/t Ag (1.9 g/t gold equiv.) from 4.8 metres downhole $\checkmark$ 72 metres at 1.8 g/t Au, 73 g/t Ag (3.2 g/t gold equiv.) from 17 metres downhole
• Initial resource estimate and metallurgical testwork was completed subsequent to $\bullet$ quarter's end. A combined Indicated and Inferred Mineral Resource of 240,000 oz. of gold and 6.9 million oz. of silver has been estimated.

Zinifex Hellyer Exploration Alliance

• Four diamond drill holes of a 19 hole programme completed.
• Drilling is ongoing and the next important phase is down-hole geophysical surveys of the ٠ completed drill holes to "vector" into proximal mineralised bodies if they exist.
• Exploration alliance agreement signed by Zinifex subsequent to the end of the Quarter.

Regional Exploration

• Sixty-five new target areas identified and work started to develop these as prospects. $\bullet$
• North Rosebery, an emerging new prospect 4km north of the world class Roseberv Pb- $\bullet$ Zn-Ag-Au mine recently yielded several high grade Pb-Zn-Ag surface samples.
• Acquisition of Farrell Line Project tenements adds increased Mineral Resources. significant advanced targets and a dominant land position in the highly prospective Rosebery and Hellyer mineralised corridor.

Corporate Administration

• Current cash at bank comprises \$2.91M, following expenditure of \$0.84 (net) on exploration for the Quarter and a capital raising of \$3.2M
• Ms Susan Hunter appointed as Company Secretary.

SEPTEMBER 2006 QUARTERLY ACTIVITIES REPORT

1.0 Exploration Activities

1.1 Que River Project

Bass Metals Ltd in collaboration with specialist mining group, Mancala Pty Ltd has undertaken an extensive programme of shallow diamond core drilling and trenching to test potential ore positions at S-Lens. PQ Lens and Nico, which may be included in the Que River Mine Plan.

Drilling re-commenced at S Lens at the beginning of July and to the end of the September Quarter a total of 28 drill holes for 1,334 metres have been completed. Drilling initially focused on S Lens and then moved to testing interpreted remnants of PQ and P North lenses (Refer Figure 1). Detailed drill results are presented in Table 1 and drill hole details in Table 2.

		rapic i wachtrei Dimmy Roodito – Ooptember waartel Lyvy
From $(m)$	$\overline{\phantom{x}}$ To (m)	Drilled	True	$Cu$ (%)	$Zn$ (%)	Ag $(g/t)$	Au $(g/t)$	Pb $(\%)$
		Interval	Width
		(m)	(m)
	S-Lens South (Copper Zone)
QRD1235
55.4	63.85	8.45	4.3	4.1	0.5	85	0.6	0.1
QRD1236
85.8	92.0	6.20	3.7	$\overline{1.2}$	0.12	23	0.3	50.1
		S-Lens South-central (Copper-Zinc Zone)
		QRD1243 (1% Cu / 5% Pb+Zn COG)
22.60	34.20	11.60	8.0	1.2	5.0	$\overline{38}$	0.4	$\overline{1.6}$
		As well as the following intercepts to the west of the S-lens position
6.30	8.70	2.40	1.7	0.9	8.5	90	0.1	4.4
16.30	18.30	2.00	1.4	1.0	$\overline{\phantom{m}}$	$\overline{33}$	0.3	$\blacksquare$
		QRD1244 (1% Cu / 5% Pb+Zn COG)
27.80	29.40	1.40	0.7	3.9	0.2	164	0.4	0.3
37.40	39.30	1.90	1.0	0.2	9.3	10	0.2	$\blacksquare$
45.60	50.50	4.90	$\overline{2.5}$	2.1	0.2	65	1.1
		QRD1245 (1% Cu / 5% Pb+Zn COG)
18.50	22.05	3.55	3.0	3.6	4.4	66	0.2	3.6
	QRD1246 (1% Cu COG)
12.00	13.00	1.00	0.7	$\overline{2.1}$		$\overline{33}$	0.5
	S-Lens North (Zinc-Lead Zone)
	QRD1237 (Zn+Pb>5% COG)
23.55	24.90	1.35	1.0	0.2	6.2	46	0.3	$\overline{3.7}$
26.80	29.95	3.15	2.5	0.2	4.2	$\overline{14}$	0.2	1.0
35.15	37.5	2.35	1.9	0.6	11.1	30	0.3	2.2
	Within a broader S-Lens zone of
23.55	37.50	13.95	11	0.2	4.1	18	0.3	1.2
	QRD1238 (Zn+Pb>5% COG)
40.30	40.70	0.40	0.20	$\blacksquare$	5.0	$\overline{11}$	0.2	$\overline{1.2}$
62.20	63.20	1.00	0.50	$\overline{3.2}$	4.5	59	1.1	1.3
66.40	76.90	10.50	5.60	0.8	12.3	46	0.4	3.9
83.50	87.00	3.50	1.90	0.4	6.90	$\overline{24}$	0.4	$\overline{3.2}$
	Within the S-Lens zone -
62.20	87.00	24.80	13.10	0.60	7.0	$\overline{28}$	0.3	$\overline{2.4}$
	QRD1239 (Zn+Pb>5% COG)
19.80	20.95	1.15	1.0	0.2	4.3	$\overline{36}$	0.5	1.4
30.5	32.5	2.0	1.70	0.1	5.0	$\overline{29}$	0.3	3.2
	QRD1241 (Zn+Pb>5% COG)
22.95	23.15	0.2	0.17	0.1	6.9	30 2	0.5	3.8
25.65	28.90	3.25	2.80	0.1	5.3	21	0.4	3.1
	Including a gold rich intercent -

Table 1 Que River Drilling Results - September Quarter 2006

Suite 5/2 Richardson Street WEST PERTH WA 6005

PO Box 1330 WEST PERTH WA 6872

Telephone (08) 9322 8044 Facsimile (08) 9481 2846

www.bassmetals.com.au

3.00	5.60	2.60		۰.	٠.	39	7.1	0.4
	QRD1240 (Zn+Pb>5% COG)
53.0	55.8	2.8	1.4	0.5	10.0	38	0.4	2.5
			As well as the following intercepts to the west of the S-lens position
36.80	37.80	1.00	0.6	0.2	5.4	26	0.4	1.5
43.80	44.80	1.00	0.6		5.3	12	0.3	1.6
47.70	48.95	1.25	0.7	m,	4.0	16	0.2	1.0
	QRD1242 (Zn+Pb>5% COG)
42.80	47.00	4.20	2.30	0.3	5.5	40	0.4	5.0
	QRD1251 (Zn+Pb>5% COG)
29.60	33.10	3.50	3.0	0.6	7.2	35	n/a	4.0
			As well as the following intercepts to the west of the S-lens position
1.80	2.80	1.00	0.8		3.5	33	1.5	1.8
4.20	5.40	1.20	1.0	-	3.6	27	1.0	1.5
23.30	24.10	0.80	0.6	$\blacksquare$	4.8	52	2.0	2.4
PQ Central
	QRD1247 (Zn+Pb>5% COG)
13.00	13.60	0.60	0.5	1.0	35.0	100	4.2	14.1
16.00	17.40	1.40	1.1	1.5	21.6	115	4.0	7.4
	QRD1248 (Zn+Pb>5% COG)
16.00	16.20	0.2	0.10	0.3	20.0	200	3.9	7.3
			QRD1249 & QRD1250 - No significant intercepts at Zn+Pb>5% COG
P North
	QRD1252 (Zn+Pb>5% COG)
10.30	16.00	5.70	4.3	0.4	13.9	146	4.3	8.0
		QRD1254 (Zn+Pb>5% COG / 1.0 g/t Au)
6.60	11.60	5.00	3.8	0.4	2.7	264	8.3	1.3

Que River - Commentary

These recent drill results are regarded as positive and supportive of the proposed initial shallow open pit mining operation. Confirmation of interpreted pods of mineralisation at PQ central and P North, with attractive gold grades at very shallow levels, has the potential to contribute enhancements to the mining plan. The development plan under detailed evaluation is for a modest scale high grade mining operation generating strong operating margins for a period of approximately 3 to 5 years.

The incorporation of the high grade PQ south mineralisation into the detailed mine plan (see ASX Release 27 July 2006) has caused some delays in progressing the ore sale/toll treatment discussions. These discussions are on going and the Directors look forward to providing a further update when the QRMA mine plan and off-take arrangements are finalised.

HOLE	Lens			Drill Hole Co-ordinates and Trace			Status
		Grid North	Grid East	Azimuth	Dip	EOH(m)
ORD1235	S-South	7349	5257	90	$-59$	98.8	Complete/Results In
ORD1236	S-South	7322	5241	90	-53	110.0	Complete/Results In
ORD1237	S-North	7485	5277	90	$-39$	50.6	Complete/Results In
ORD1238	S-North	7485	5276	90	-58	97.5	Complete/Results In
ORD1239	S-North	7512	5284	90	$-30$	45.0	Complete/Results In
ORD1240	S-North	7513	5283	90	-56	74.5	Complete/Results In
QRD1241	S-North	7525	5288	90	$-30$	44.6	Complete/Results In
QRD1242	S-North	7525	5286	90	$-57$	66.0	Complete/Results In
QRD1243	S-South	7402	5274	90	-44	56.6	Complete/Results In
ORD1244	S-South	7402	5274	90	$-57$	71.8	Complete/Results In
ORD1245	S-South	7350	5299	270	$-30$	29.7	Complete/Results In
QRD1246	S-South	7300	5274	90	$-45$	50.7	Complete/Results In
QRD1247	PQ 7500 pod	7513	5182	270	$-34$	22.9	Complete/Results In
QRD1248	PQ 7500 pod	7513	5183	270	$-56$	29.8	Complete/Results in
QRD1249	PQ 7500 pod	7488	5182	270	$-40$	20.7	Complete/Results in
ORD1250	PQ 7500 pod	7525	5182	270	$-35$	38.5	Complete/Results In
QRD1251	S-North	7507	5281	90	$-30$	44.7	Complete/Results In
QRD1252	PNIh	7650	5168	90	$-41$	22	Complete/Results In
QRD1253	PNIh	7650	5167	90	$-70$	29.9	Complete/Results In
QRD1254	PNIh	7650	5203	270	-39	18.4	Complete/Results In

Table 2 Que River drilling summary

BASS METALS LTD

1.2 Mt Charter Gold Project

Drill Results

Mt Charter is an outcropping zone of gold and silver mineralisation which had never been subjected to systematic evaluation as a gold ore body. During the Quarter the Company completed its second drilling programme at Mt Charter and reported results for the final 9 drill holes of the programme as presented in Table 3 below. The recent results also support a shallow, wide zone of gold-silver (+ zinc) mineralisation associated with strong barite alteration at Mt Charter. A summary drill hole location plan is presented in Figure 2 and drill hole details are summarised in Table 4 below.

Table 3: Summary of assay results for Mt Charter Drilling Programme (1.0 g/t gold cut-off)

From	To	Down hole	Gold	Silver	*Gold	Zinc	Lead	Insitu
		Interval (m)			Equiv.			Bulk
(m)	(m)		(g/t)	(g/t)	(g/t)	$(\%)$	$(\%)$	Density (g/cm 3 )
MCD28
73	78	5	1.8	14	2.1	0.8	0.2	$\overline{31}$
91	96	$\overline{5}$	1.1	$\overline{7}$	1.2	0.2	$\blacksquare$	2.9
101	105	$\overline{4}$	1.1	10	1.3	2.0	0.4	3.4
MCD29
4.8	39.0	34.2	1.4	27	1.9	0.5	0.2	3.3
MCD30
$\overline{17}$	28	11	1.5	27	2.0	0.6	0.2 0	3.1
35	40	$\overline{5}$	1.0	$\overline{25}$	1.5	0.5	$\overline{0.2}$	$\overline{3.1}$
80	84	$\overline{4}$	$\overline{1.3}$	$\overline{29}$	$\overline{1.9}$	0.4	$\mathbf{m}^{\prime}$	3.0
MCD31
1	$\overline{17}$	16	1.4	30	2.0	0.5	0.2	3.0
$\overline{41}$	49	$\overline{8}$	1.1	$\overline{36}$	$\overline{1.8}$	$\overline{2.6}$	1.1	$\overline{2.7}$
		Includes 4m from 40m at 5.6% Zn all occurring within a broader zone defined at 0.5 glt assay cut-off
0	52	52	1.0	19		0.8	0.4	2.9
MCD32 $\overline{0}$	$6\phantom{.}6$	6	1.3	32	1.9		0.2	3.2
111	117	$\overline{6}$	1.1	14	1.4	0.7 1.9	0.4	3.7
153	164	11	1.1	19	1.5	1.0	0.4	3.3
MCD33
11	19	8	1.5	27	2.0	0.3		3.0
129	134.8	5.8	1.4	28	1.9	1.0	0.4
MCD34
17	89	72	1.8	$\overline{73}$	3.2	0.8	0.2	3.4
		Includes 4m from 42m at 3.6% Zn within a broader zone defined at a 0.5 glt Au assay cut off
14	106	92	1.6	62	2.8	0.7	0.2
MCD35
52	111	59	1.4	14	1.7	1.0	0.4	3.1
148	152	$\overline{4}$	1.4	14	1.7	1.9	0.4	3.2
	Includes at a 0.5 g/t Au assay cut off
120	154	34	0.7	17	1.0	0.7	0.3	3.1
		Significant zinc intercepts include (>1.0% Zn)
47	52	5	0.5	15	0.8	2.1	1.3	2.9
94		$108$ 14	$\overline{2.2}$	$\overline{18}$	$\overline{2.5}$	$\overline{2.2}$	0.9	$\overline{3.3}$
133	148	15	0.7	$\overline{21}$	1.1	1.4	0.6	3.2
MCD36
39	53 $\overline{77}$	14	1.2	40	2.0			2.7
64		13	1.5	$\overline{37}$	2.2	0.5	$\blacksquare$	3.3
32	Includes at a 0.5 g/t Au assay cut off 83	51	1.0	29	1.6	0.3		2.9
100	116.4	16.4	0.7	$\overline{6}$	0.8			2.7
3.0	58.4	55.4	1.5	36	2.2	1.0	0.5	3.2
		And includes a zinc rich zone of >1% Zn
23.5	57.0	33.5	1.9	43	2.7	1.4	$\scriptstyle\star$

Figure 2: Drill hole location plan for Mt Charter.

Table 4: Mt Charter Drilling Programme Hole details

Hole	Grid North	Grid East	Depth(m)	Inclination	Progress/results as at 30 June
MCD025	4590	4261	134.8	-60	Complete/received
MCD 026	4690	4342	119.8	-60	Complete/received
MCD 027	4690	4342	106.6	$-35$	Complete/received
MCD 028	4790	4282	188.8	-52	Complete/received
MCD 029	4790	4355	131.8	$-43$	Complete/received
MCD030	4840	4352	89.8	$-45$	Complete/received
MCD 031	4740	4353	110.3	-44	Complete/received
MCD 032	4729	4274	186.9	-58	Complete/received
MCD 033	4687	4261	134.8	-63	Complete/received
MCD 034	4626	4318	142.2	$-33$	Complete/received
MCD035	4690	4301	376.5	-62	Complete/received
MCD036	4602	4320	116.4	$-40$	Complete/received

All holes are drilled grid (local) east except MCD036 which is drilled grid north-west.

Mt Charter Mineral Resource Estimate

As reported on 30 October, subsequent to quarter's end, Snowden Mining Industry Consultants ("Snowden") have undertaken a resource estimate for the Mt Charter Au, Ag. Ba and Zn deposit as part of the Company's ongoing project evaluation.

The resource estimate is based on a geological model jointly compiled by Bass Metals and Snowden. The Mt Charter mineralisation comprises a barite-rich vein package which has a NNE trending enveloping surface and sub-vertical/steep westerly dip. These veins sit within dacitic host rocks which are mineralised through volcanic hosted massive sulphide (VHMS)-style alteration.

Tonnage and grade estimation are based on a 'change of support' geostatistical technique that is targeted at modelling the deposit behaviour using anticipated open pit mining on five metre high benches and a mining selectivity of 5 m by 10 m by 5 m. The change of support process is based on multi-element conditional simulation.

The total resource estimated for the Mt Charter deposit is 6.1 Mt at 1.22 g/t Au. 35.5 g/t Ag. 9.7 % Ba and 0.5% Zn. The resource is reported above a 0.7 g/t Au cut-off within the mineralised envelope boundary and is classified as Indicated and Inferred Resources according to the JORC code (December 2004), as listed in Table 5 below.

Estimation Process

The Mt Charter mineralisation interpretation for this estimate was compiled by Travis Murphy: Bass Metal's Supervising Geologist, with assistance from Snowden. Paul Blackney of Snowden reviewed data collection procedures undertook database checks and inspected core on site. Shaun Hackett (Snowden) reviewed the geological interpretation and was responsible for compiling the grade estimates. Both P Blackney and S Hackett are Competent Persons being Members of the AusIMM with more than five years experience relevant to gold and multi-element mineral resource estimation.

JORC Code Category	Tonnes	Au	Ag	Ba	Zn	Au	Ag	Au (eq)*
	Mt	g/t	g/t	%	℅	koz	koz	koz
Indicated	1.9	1.21	36.3	9.1	0.7	74	2,218	118
Inferred	4.2	1.22	35.2	10.0	0.4	165	4.754	260
Total	6.1	1.22	35.5	9.7	0.5	239	6,971	378
* Au (Eq) is based on Au & Ag price only; US\$590/oz and US\$11.80/oz respectively to give a Ag to Au ratio of 50:1.

Table 5: Summary of Classified Mt Charter Mineral Resource (0.7g/t Au cut-off

The resource estimates were classified in accordance with the JORC Code (December 2004) after input from both Bass Metals and Snowden. The classification is a function of data integrity, drill hole spacing, knowledge of geological characteristics and expected grade continuity.

Mt Charter - Metallurgical Testwork

Metallurgical testwork has been undertaken to gain a preliminary understanding of the metallurgical characteristics of the Mt Charter mineralisation and its response to possible processing routes. Preliminary testwork included head assay, mineralogy, direct cyanidation and sulphide flotation followed by cyanidation then barite recovery by gravity and barite flotation.

Summary of testwork results

A composite sample representing variable depths, gold, silver, zinc and copper contents was submitted for testwork.

The Bond ball mill work index was determined to be 14.7kW/tonne. Summary results for cyanidation and flotation testwork are presented in Table 6 below.

	Table 6: Summary of Metallurgical Testwork Results

			Elements
Testwork	Au	Aq	Cυ	Zn	Ba
Head Assay	$1.6$ ppm	34.2 ppm	594 ppm	1.50%	17.60%
			Recovery (%)
Direct Cyanidation	48	10	12	0.2
Flotation	86	92	93	98	2
Cyanidation of Float Tails	60	34	13	4
Overall recovery for float followed by cyanidation	95	95
Barium Recovery by		,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,			84
Flotation

The objective of the flotation testwork was to assess the flotation behaviour of Au, Cu, Ag Pb and Zn mineral species and to float a bulk sulphide concentrate. These preliminary, bench scale test

results show encouraging recoveries using a flotation stage followed by a cvanidation process route. The low recovery of precious metals by direct cyanidation was consistent with historic results reported previously and appears to be attributable to approximately 50% of the gold being present within the sulphide mineral grains. Direct cyanide recovery was relatively insensitive to grind size over a 45 to 75 micron size range.

Metals recovery to a bulk flotation concentrate is summarised in Table 7. Overall the recoveries obtained were good considering the simplicity of the flotation circuit. The objective of the next phase of testwork is to determine the upgrade potential of these concentrate grades to commercial levels. A separate test was undertaken for barite to assess flotation as a possible process for upgrading barite into a potentially saleable product. The barite concentrate produced had a barium grade of 50.2 % which is equivalent to 85.3% barite which at first pass exceeds the 65% barite standard generally adopted in the drilling and chemical industries.

.		---------------------------------------
	Au	Ag	As	Сu	Fe	Pb		Ζn
	a/f	-Q/t
Rougher Conc. Grade		183	0.4	0.30	20.9	J.O	30.1	ზ.ნ
% Recovery to Conc.	86	92	70	93	80	OT	54	98

Table 7: Flotation recovery and grade

Commentary - Mt Charter

The results achieved to date are consistent with results reported previously and indicate a substantial, shallow gold-silver (zinc + barite) deposit with an interesting and potentially economic zinc and barite credit with favourable mining geometry. This resource base has the critical mass to warrant further work to build the Company's gold inventory both at Mt Charter but also regionally.

As the metallurgical testwork continues the exploration team will evaluate other known occurrences of gold mineralisation such as around the Hellyer and Que River deposits and on the newly acquired Farrell tenements along the Henty fault, south of Que River. The aim is to understand the potential resource base which could support the various gold processing options as they emerge from the next phase metallurgical testwork. The metallurgical testwork, whilst very preliminary in its nature shows encouraging potential to provide an opportunity to extract value from this polymetallic deposit as well as others in the district.

1.3 Zinifex Hellyer Exploration Alliance

The Hellver Exploration Alliance (HEA) is an exploration alliance between Zinifex Limited and Bass Metals whereby each party contributes equally to a \$2.0M exploration programme focused only on the Hellyer Project tenements. During the HEA period which expires on 2 August 2007 Zinifex has the opportunity to "carve-out" up to four special project joint venture areas (SPJVA) each being less than 2km² on which it can then earn up to a 70% interest. The Que River mining area and the Mt Charter area have been excluded from Zinifex's SPJVA rights.

The HEA is managed by Bass Metals and since early July it has been busy drill testing a series of targets considered prospective for new Hellyer-Que River style high-grade base metal deposits. Figure 3 shows the location of drill holes completed to date and those currently proposed. Table 8 is a summary status report of the drilling completed.

The HEA drill holes have so far provided positive geological indications of mineralisation in the area. If a major mineral deposit can be likened to a fire, then each of 4 drill holes has "indicated smoke of varying density" by intersecting zones of strong alteration consistent with alteration associated with the Hellyer and Que river ore deposits. The drilling has also correlated well with the revised geological model the HEA is using to generate deposit targets. No assay results were received by the end of September, though given the lack of strong sulphide mineralisation intersected to date assaying is being carried out largely to gain further data on geochemical signatures and alteration styles.

Figure 3: HEA summary plan of target locations and proposed and completed drill holes

Table 8: HEA drill hole details

Hole No.	North (grid) East	(arid) l	RL	Avg Az. (grid)	Avg. Dec.	Total depth I	Taroet
HED 1	10400	6088.12	711.2	271	68	320.4	Hellver East
HED2	9999.99	6058.01	732.61	268	70	462	Hellver East
HED3	8999.99	6065.16	690.6	271	53	437.6	Switchback
HED4	8574.99	5809.79	690.06	269	52	In progress	Switchback

Commentary - HEA

Whilst it is possible that any one of the drill holes proposed could drill straight into a high grade massive sulphide base metal zone, which would be readily apparent from visual inspections, the strategy is to follow-up with down-hole geophysical surveys to focus a second round of drill holes in those targets which give a positive geophysical response known as an "off-hole conductor".

The down-hole geophysical surveys are the next vital step to provide focus into possible mineralised zones and this is due to commence in November. This drilling programme is ongoing systematically working through the targets. At this stage the Directors are encouraged by the "smoke" indicating potential proximal positions to new mineralised zones.

1.4 Regional Exploration

During the Quarter planning and initial ground assessment of the 65 mineralised targets generated over the previous 8 months commenced. North Rosebery has emerged as an exciting early stage prospect.

The North Rosebery prospect is located 4km north along strike from the Rosebery Mine. It is located on EL53/2005 which is 75% owned by Bass Metals and 25% by Geoinformatics Exploration Inc. The target area shown in Figure 4 appears to be located in a structural flexure in close spatial association with the Rosebery and Mt Black faults, which are interpreted as important controls on the formation of the Rosebery deposit. Geological modeling and field inspections indicate that the target area occurs within the same suite of rocks, the Rosebery Shale, as the Rosebery deposit and with associated felsic tuff units which are also found at Rosebery.

As well as the very favourable geological setting several other features highlight the prospectivity of this area to host a significant new base metal deposit.

Geophysics

A geophysical survey (Induced Polarisation (IP)) completed in the mid 1990's generated several high order chargeability anomalies possibly indicative of mineralisation.

Anomalous geochemistry

Anomalous zinc values were intersected in two drill holes completed in the 1970's to the north of the geophysical anomalies and the target area. These results include elevated zinc values such as 39 metres at 0.08% Zn, 11 metres at 0.18% Zn and 37 metres at 0.16% Zn. One drill hole within the central target area intersected low level anomalous (up to 450 ppm) Zn as well as quartz-sericite-pyrite alteration with minor galena. This intercept was also highly anomalous in manganese (up to 17,000 ppm) which may be important as the Rosebery deposit apparently has distinctive manganese alteration. High grade surface samples

Bass Metals took two surface rock chip samples which returned the following assays:

• NR01 1.3% Pb, 0.3% Zn, 136 g/t Ag and 0.14 g/t Au
• NR02 4.2% Zn and 10 g/t Ag.

NR1 comprised altered volcanic and volcaniclastics with disseminated pyrite, whilst the second sample. NR2 consisted of quartz vein material within altered volcanics. The Company considers that these results are highly significant in supporting the potential for the discovery of a major high grade base metal deposit.

The acquisition of the Saracen tenements known as the Farrell Line Project boosts the Company's Mineral Resource inventory (refer ASX Report 3 July 2006) and consolidates a highly prospective corridor extending from north of the Henty Gold Mine to just south of the Hellyer-Que River tenements.

Commentary

Regional Exploration targets such as North Rosebery are emerging through the collaboration with Geoinformatics Exploration Inc. It is worth noting that volcanogenic massive sulphide (VMS) deposits such as Rosebery, Hellyer and Que River typically occur in clusters. The Directors consider that exploration analogies with mined VMS deposits such as Golden Grove and Teutonic Bore located in Western Australia, where significant new discoveries have been made within 4-5km of the original mine 20 to 40 years after the initial discoveries, are valid for the North Rosebery Prospect. The North Rosebery target area has seen virtually no drill testing, despite high grade surface assays, and lies just 4km north of the large high grade Rosebery Mine that has been in production for the past 80 years. The convergence of geological features similar to the Rosebery deposit, with anomalous geophysical and geochemical responses provides strong encouragement to further test this area on a high priority basis.

The Company has the largest tenement position in the highly mineralised Mt Read Volcanic belt. which hosts large scale ore deposits such as the Hellyer, Que River, Avebury, Rosebery, Mt Lyell, Renison Bell and Henty deposits with exciting potential for further similar discoveries. This is the fourth, vital initiative to its Tasmania strategy.

The Company has a QA/QC procedure for all assaying runs which involves submission of "blank" samples, assay standards and repeat samples at a frequency of approximately 1 per 25 samples submitted comprising approximately 10% of samples submitted. To date all results returned have been within acceptable limits.

All the drill samples submitted during the Quarter are half core and all sample preparation and analyses were carried by Ammtec Laboratories at its Burnie Research Laboratory. Gold and silver were analysed by fire assay using a 50g charge with base metals
analysed using a triple acid digest and AAS finish.

The information within this report that relates to exploration results is based on information compiled by Mr Mike Rosenstreich who is a full time employee of the Company and is a Member of The Australasian Institute of Mining and Metallurgy. He 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 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and consents to the inclusion of this information in the form and context in which it appears in this report.

The information within this report that relates to Mt Charter Mineral Resources is based on information compiled by Mr Paul Blackney and Mr Shaun Hackett who are both full time employees of Snowden Mining Industry Consultants and Members of The Australasian Institute of Mining and Metallurgy. Mr Blackney and Mr Hackett have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken to qualify as a Competent Person as defined in the .
2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and consent to the inclusion of this information in the form and context in which it appears in this report.

2.0 CORPORATE

At the end of the quarter the company's financial position stands at \$2.91 million cash at bank. Total exploration expenditure for the Quarter was \$1.16 million which includes Zinifex's share of the HEA expenditure of which \$320k was paid subsequent to the end of the Quarter.

It has been a very active quarter for the Company on both the corporate and exploration fronts with the following activities initiated or completed during the period.

• Acquisition of 3 exploration licences covering 148km2 of prospective host rock units and fault structures from Saracen Mineral Holdings Limited. Following documentation and Ministerial consent this transaction is due to be settled in early November with the Company issuing Saracen with 6.4 million shares and a cash payment of \$275,000. Shareholders approved the issue of these shares in two tranches to Saracen at the General Meeting held on 10 August 2006.
• A placement of 20 million shares approved by Shareholders at the August GM was $\bullet$ completed raising working capital of \$3.2 million before costs.
• Ms Susan Hunter was appointed Company Secretary on the 28 September. She is a highly experienced and well regarded professional who worked with the Company for several months prior to this appointment.
• Following the end of the Quarter the Company has received executed agreements from $\bullet$ Zinifex Limited in regard to its Hellver Exploration Alliance.

I look forward to providing further updates of the Company's business activities.

Yours sincerely

Mike Rosenstreich Managing Director

Appendix 5B

$Rule 5.3$

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Bass Metals Ltd

Current quarter

ABN

31 109 933 995

Quarter ended ("current quarter")

30 September 2006

Year to date

Consolidated statement of cash flows

Cash flows related to operating activities

	Cash flows related to operating activities	\$A'000	$\left(\begin{array}{c} 3 \end{array} \right)$ months) \$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for (a) exploration and evaluation (b) development	(1, 155)	(1155)
	(c) production (d) administration	(167)	(167)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	30	30
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows	(1,292)	(1,292)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a)prospects	(132)	(132)
	(b) equity investments
	(c) other fixed assets	(4)	(4)
1.9	Proceeds from sale of:
	(a)prospects
	(b) equity investments
	(c)other fixed assets
1.10	Loans to other entities
1.11	Loans repaid by other entities
1.12	Other (provide details if material)
	Net investing cash flows	(136)	(136)
1.13	operating and investing cash flows Total (carried forward)	(1, 428)	(1,428)

⁺ See chapter 19 for defined terms.

1.13	operating and investing cash flows Total (brought forward)	(1, 428)	(1,428)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	3,200	3,200
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Costs of share issues	(143)	(143)
	Net financing cash flows	3,057	3,057
	Net increase (decrease) in cash held	1,629	1,629
1.20	Cash at beginning of quarter/year to date	1,279	1,279
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	2,908	2,908

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

		Current quarter \$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	122
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions

All transactions with directors and their related parties are on normal commercial terms

Non-cash financing and investing activities

• $2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
• $2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

⁺ See chapter 19 for defined terms.

$\overline{a}$

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available \$A'000	Amount used SA'000
3.1	Loan facilitíes	Nil	Nil
3.2	Credit standby arrangements	Nil	Nil

Estimated cash outflows for next quarter

4.1	Exploration and evaluation	SA 000 865
4.2	Development
	Total	865

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter \$A'000	Previous quarter \$A'000
5.1	Cash on hand and at bank	65	84
5.2	Deposits at call	2,843	1,195
5.3	Bank overdraft
5.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	2,908	1.279

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note(2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed
6.2	Interests in mining tenements acquired or increased

⁺ See chapter 19 for defined terms.

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price per security (see note $3)$ (cents)	Amount paid up per security (see note 3) (cents)
$7.1\,$	Preference i securities (description)
7.2	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3	+ Ordinary securities	56,600,013	47,471,959
7.4	Changes during quarter (a) Increases		20,000,000	16 cents and issued 16 on August 2006
	through issues (b) Decreases through returns of capital, buy- backs		10	16 cents and issued 25 on. August 2006
7.5	+ Convertible debt securities (description)
7.6	Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7	Options (description and conversion factor)	8,275,000 2,375,000 350,000 350,000	6,104,375	Exercise price 25 cents 25 cents 30 cents 35 cents	Expiry date 31.07.07 31.12.07 31.12.07 31.12.07
7.8	Issued during quarter
7.9	Exercised during quarter
7.10	Expired during quarter
7.11	Debentures (totals only)

⁺ See chapter 19 for defined terms.

Compliance statement

• $\mathbf{I}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to $\text{ASX}$ (see note 4).
• $\overline{2}$ This statement does /does not* (delete one) give a true and fair view of the matters disclosed.

Date: 31 October 2006

Sign here:

Print name:

Michael Rosenstreich (Managing Director)

Notes

• $\begin{array}{c} \end{array}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• $\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items $61$ and $62$
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

$= 50$

⁺ See chapter 19 for defined terms.