GREENWING RESOURCES LTD — Interim / Quarterly Report 2008

Jul 29, 2008

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ABN 31 109 933 995
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30 July 2008

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

Dear Sir

JUNE 2008 QUARTERLY REPORT OF ACTIVITIES & CASHFLOW

Base Metals

Mine Operations – Que River

• No lost time injuries or environmental incidents since project commencement.

• Quarterly mine production of 17,071 tonnes of ore and record ore sales of 16,483 dmt.

• Highly positive reconciliation trends continue for the Quarter; 103% more tonnes, 22% higher Zn grades, 41% higher Pb grades, 47% higher Ag grades and 63% higher Au grades mined than predicted.

• Estimated revenues for the quarter are $3.5 million (equivalent to $212/tonne sold) or, after estimated hedge settlements for the Quarter, are $4.1 million (equivalent to $248/tonne sold).

• Operating costs* for the Quarter were adversely impacted by a change in the stockpile valuation of $41/t ( non cash cost ) and increased mining costs of $24/t included in the figures below. The rise in mining costs is attributable largely to a short-term increase in the mine fleet to facilitate waste mining to the end of July. Que River Operating costs are:

Unit Cost basis	Unit	June 08 Qtr	FY to date
Ore sold	$/dmt	238	189
OreMined	$/wmt	229	163

*These operating costs comprise all operating costs, including mining, treatment, haulage, royalties, depreciation and amortisation of mine properties but excluding capitalised mine development

• Project is cash flow positive. Que River Total Cash Costs* are:

		Actual	Actual
Unit Cost basis	Unit	June 08 Qtr	FY to date
Value oforemined	$/wmt	246	243
TotalCost oforemined	$/wmt	211	217
OperatingMargin	$/wmt	35	27
Marginas a % ofCost	%	16	12
Note estimated hedging settlements for the ore delivered during the quarter is not included above, and will add a further $36 per tonne to the operating margin.

• *All costs incurred during the period, with no accounting adjustments as above plus the expected costs to realise value from the stockpile inventory-namely haulage, treatment charges and royalties.

• Improved margins are expected in the September Quarter due to a focus on the higher grade PQ pit.

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

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Exploration Activities

Hellyer Mine project (HMP)

• The Company’s core exploration focus is the HMP; namely drilling at Fossey Zone and the continuing Mining Study activities.

• Fossey Zone yields further significant intercepts, including:

• 12.75 metres at 18.5% Zn, 8.8% Pb, 0.6% Cu, 273 g/t Ag and 2.83 g/t Au

• 9.1 metres at 13.2% Zn, 8.5% Pb, 373 g/t Ag and 4.1 g/t Au

• Mineralisation now defined over at least 170 metre strike extent.

• Positive early indications from metallurgical testwork as mining study progresses.

Advanced Projects

The company has focussed on high grade base and precious metals prospects on its leases with a view to undertaking drilling programmes as soon as practical. This includes the historic mining centres of:

• Oonah – historic grades of 16 oz/t Ag, 7.4% Pb and 9 oz/t Ag and 13.5% Pb.

• Magnet – historic grades of 13 oz/t Ag, 6% Pb and 7% Zn.

• Farrell – historic grades of 14 oz/t Ag and 13% Pb.

Early Stage Exploration

OZ Minerals Hellyer Exploration Alliance (HEA)

OZ Minerals (formerly Zinifex) has undertaken targeting work on its 4 special joint venture project areas. Drilling on the Highpoint prospect commenced in late July. Bass Metals retains a 30% free carried interest to a “decision to mine” stage in each area.

Regional Exploration

Results of an airborne geophysical survey (using VTEM system) were compiled and interpreted during the quarter. Several valid exploration targets were generated, which will be followed up.

Gold

The Company continued low level work on its Mt Charter gold Mineral Resource and the Sterling Valley gold project. Further drilling and evaluation work is planned.

Nickel & Other Metals

The VTEM survey included the nickel-in-soil anomaly at Heazlewood, which generated a VTEM anomaly response. The anomaly is coincident with a nickel-in-soil anomaly, favourable ultramafic host rocks and geological structure – and warrants testing with drilling.

The Company has been assessing the magnetite iron potential at the Whyte River and Heazlewood tenements with a view to farming-out the iron rights.

Corporate Administration

Cash at bank at the end of the Quarter comprises $4.43 million, with an overall positive working capital position of $5.5 million. This does not include the $2.7 million positive value in the Company’s hedge book.

Apart from minor leasing and bond commitments, Bass Metals has no debt

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

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Commentary

Bass Metals continues to perform well in a volatile and challenging market environment due to its high grade mining operations and assets, underpinned by prudent financial management. The strategy is to develop robust high grade projects such as Que River, Hellyer Mine project and potentially high grade prospects such as Oonah, Magnet and Farrell. The well known maxim, “Grade is King” refers to both profitability and flexibility to withstand times of adversity.

Developing Mines

Que River continued to perform well in the June Quarter. Highly positive grade and tonnage reconciliations have buffered the project from lower metal prices and higher input costs such as fuel. The project is cash flow positive albeit with reduced margins, as indicated by the June total costs of $211/t of ore mined against an estimated value of $246/t before any hedge benefits. With a reduction in waste mining and a focus on the high grade PQ pit these margins, at “current” prices are expected to improve.

A focus on grade and robust mining opportunities such as Que River will drive the Company’s growth and value in the near term, and this is where the Company’s activities are focused. Continuing positive high grade drill intercepts at Fossey, along with positive early metallurgical indications, supported with an exciting mining concept for early access to the ore gives these activities strong momentum. Given the projects’ close proximity to two operating processing plants and regional infrastructure; it is planned for this momentum to “carry” through to early production.

Finding New Deposits

With the obvious focus on the advanced projects it is important to also realise that Bass Metals continues to look for other opportunities to grow its business. A core component of this is early stage exploration work. The results from the recent VTEM survey are regarded as encouraging, and the Board is excited about the planned drilling at the Heazlewood nickel prospect. As well, the Company’s management continues to assess acquisition opportunities in Tasmania, Australia and off shore.

In conclusion

The Company is focussed on operating and developing its high grade base and precious metal assets to generate the funds required to grow the business. Significant further progress on this is expected in the next six months, particularly at the Hellyer Mine project.

I look forward to providing further updates on our progress in these activities.

Yours sincerely

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Mike Rosenstreich Managing Director

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

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JUNE 2008 QUARTERLY ACTIVITIES REPORT

A. BASE METALS

A1.0 Mine Operations – Que River

A1.1 SAFETY & ENVIRONMENT

No lost time injuries or material environmental incidents have occurred during the Quarter or since the start of the project. In early July a minor discharge of untreated water from the settlement dam occurred due to exceptionally heavy rainfall.

A1.2 MINING ACTIVITIES

Mined tonnages of ore in the June Quarter exceeded predictions from the Ore Body model by 103% ( refer Table 1 ). Actual mined grades for zinc, lead, silver and gold exceeded predictions by 22 to 63%; a further improvement on the last quarter.

The project to date reconciliation of mined versus predicted tonnages is strongly positive with a greater ore contribution from the PQ pit. All metal grades except copper are significantly higher than predicted.

Table 1: Production Comparison – Mined vs Predicted

	Tonnes**	Zn (%)	Pb (%)	Ag (g/t)	Au (g/t)	Cu (%)
June 08 Quarter
Predicted (OBM*)	8,429	10.8	5.4	162	2.8	0.32
Ore Mined	17,071	13.1	7.6	237	4.6	0.28
Variance to OBM	103%	22%	41%	47%	63%	-11%
Project to Date
Predicted (OBM*)	35,070	10.0	4.3	93	1.6	0.43
Ore Mined	43,807	11.3	6.1	162	2.9	0.34
Variance to OBM	25%	13%	42%	73%	79%	-22%

(OBM=Ore Body Model used for the original budget; *Tonnes are wet metric tonnes (wmt))

A1.3 ORE SALES

A total of 16,854 wet metric tonnes (wmt) of ore was sold to OZ Minerals’ Rosebery operations during the Quarter, consistent with Bass Metals’ target of 5,000 wmt per month ( refer Table 2 ). A significant inventory position has been maintained at 5,893 wmt as at the end of the Quarter.

Table 2: Mining Summary – June 2008 Quarter

	Tonnes (wmt)	Zn (%)	Pb (%)	Ag (g/t)	Au (g/t)	Cu (%)
Opening Stocks at QR	5,677	9.3	4.9	92	1.3	0.4
Oremined*	17,071	13.1	7.6	237	4.6	0.28
Ore Delivered to OZM	16,854	12.7	7.2	205	3.9	0.32
Remaining Stocks at QR	5,893	10.5	6.0	191	3.4	0.3

* "Remaining Stocks" and "Mined" are estimates from grade control

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

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A1.4 OPERATING PERFORMANCE

Revenues

Revenue for ore sold during the June Quarter is estimated to be $3.5 million. This amount does not include hedging gains associated with ore sold.

After correcting for minor moisture content, ore tonnes sold is 16,483 dry metric tonnes (dmt) which yields gross revenue of $212/dmt sold. On a year to date basis revenue is $9.37 million equivalent to $248/dmt sold. Revenue quoted above is based on actual tonnes delivered and invoiced. Revenue estimates and eventual cash flows are affected by the time lag between delivery of the sold ore and fixing the realised price; for zinc and lead this time lag is three months, for gold and silver one month and for copper six months.

Hedging gains associated with ore sold during the quarter are estimated at $0.6 million resulting in a total estimated value of ore sold for the quarter of $4.1M or $248/dmt.

Costs

A summary of operating costs for the Quarter and Financial Year (FY) to date is presented in Table 3 below. The cost calculation is based on all operating costs, including mining, treatment, haulage, royalties, depreciation and amortisation of mine properties but excludes capitalised mine development for the Quarter consistent with the Company’s accounting policies as detailed in the 31 December 2007 half year report. The difference between “sold” and “mined” unit cost reflects the closing inventory position.

Table 3: Unit Operating Costs

Unit Cost basis	Unit	June 08 Qtr	FY to date
Ore sold	$/dmt	238	189
OreMined	$/wmt	229	163

Note the June Qtr costs include a $41/t stockpile valuation adjustment.

The unit operating unit costs have increased during the Quarter largely as of a result of accounting standard requirements for the valuation of inventory based on unit operating costs. Although the 31 March 2008 and 30 June 2008 closing stockpile tonnages are similar, closing stock valuations were $0.69 million less in June because the June unit operating cost was lower than in March, resulting in additional production costs being expensed to the Profit and Loss Statement. This comprises an additional $41/t mined of the figures above for the June Quarter. A “real cost increase” of $24/t in mining costs for the Quarter also makes a significant contribution to the June unit cost figures and is largely due to an increase in the mining fleet during the Quarter to facilitate waste mining as well as increased fuel and explosive costs. The extra mine fleet components have since been de-mobilised.

Total capital costs for the Quarter were $0.04 million, bringing the project to date expenditure to $0.60 million, which is in line with the mine plan.

Operating Margin

To monitor and manage the financial performance of the project; i.e. the margin between cash costs and revenues, the Company also prepares management reports to determine the net realisable value and operating margin of ore mined. The reports include adjustments to the Company’s accounting policies for the following:

Revenue

• Adds the expected revenues from the stockpiles to those from ore already sold and delivered in the period.

Costs

• Collation of all of the costs incurred during a period, with no accounting adjustments for depreciation and amortisation of mine properties or capitalising of mine development.

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

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• Addition of expected costs to realise value from the stockpile inventory - namely haulage, treatment charges and royalties.

On this basis a summary of the Que River mine operating performance is presented in Table 4 below.

Table 4: Estimate of Operating Performance

		Actual	Actual
Unit Cost basis	Unit	June 08 Qtr	FY to date
Value oforemined	$/wmt	246	243
TotalCost oforemined	$/wmt	211	217
OperatingMargin	$/wmt	35	27
Marginas a % ofCost	%	16	12
Note estimated hedging settlements for the ore delivered during the quarter are not included above, and will add a further $36 per tonne to the operatingmargin.

Clearly the operating margin of the project has been adversely affected by the recent decline in lead and zinc prices and a rise in fuel and explosive costs. The project is currently cash-flow positive and is well supported by the Company’s hedge book. Management is re-assessing its production schedule and cost structures to improve margins. Fortunately the high grade of the deposit provides for some flexibility in this regard, as does the positive tonnage and grade reconciliations for the PQ pit, which will be the primary ore source in the near term.

Figure 1. PQ Pit looking North

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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

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Figure 2: Tenement Location Plan – BSM tenement interests

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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

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A2.0 Base Metal Exploration Activities

A2.1 ADVANCED PROJECTS

The Company has an exciting profile of advanced polymetallic prospects to underpin its growth prospects. A particularly attractive feature of all of the prospects is the high base and precious metal grades.

A2.1.1 Q ue River

There is significant exploration potential at Que River in the vicinity of the current shallow resources and also to the south and at depth within the wide alteration zone which hosts the defined Que River mineralised lenses. No drilling was completed during the Quarter; however review of current data for further drill testing is ongoing.

A2.1.2 Hellyer Mine Project (HMP)

The HMP continued as the Company’s core focus during the June Quarter. The project comprises a combined Mineral Resource (Indicated and Inferred*) of 748,000 tonnes grading 7% Zn, 4% Pb, 0.3% Cu, 87 g/t Ag and 1.3 g/t Au around the now closed Hellyer Mine workings, as well as the Fossey Zone located immediately south of the Hellyer workings, which is not included in the above Mineral Resource.

(*reported to ASX 26 October 2007)

The HMP activity focus has been to:

• Drill out Fossey Zone – a further 10 drill holes were completed, with 2 in progress for a total of 2,348 metres in the Quarter.

• Continuation of the Mining Study comprising, resource assessment, mining studies, environmental studies and metallurgical testwork.

Drilling at the Fossey Zone is targeting the along strike and down dip extensions of high grade massive sulphide intersected previously. Drilling has been accelerated during the Quarter with the arrival of a second drill rig.

A summary table of drill hole locations, completed during the Quarter, is shown in Table 5 and a schematic drill plan and long projection in Figures 3 and 4 respectively. The key cross-sections illustrating the recent drilling are included as Figures 5 to 8.

Table 5: Fossey Zone Drill hole details

HOLE	TARGET	COLLAR NORTH	COLLAR EAST	COLLAR RL	AZ (grid)	DIP	EOH
HLD965*	Fossey	10099.65	5675.77	683.73	270	-68	299.7m
HLD966	Fossey	10250.11	5630.58	675.44	270	-58	258.1m
HLD967	Fossey	10148.56	5653.24	679.73	270	-58	275.7m
HLD968	Fossey	10249.99	5629.33	675.52	270	-53	20.4m (Abandon)
HLD969(a)	Fossey	10250.00	5628.80	675.50	270	-52	11.4m (Abandon)
HLD969	Fossey	10249.89	5627.83	675.43	270	-53	281.7m
HLD970	Fossey	10148.48	5652.83	679.80	270	-52	269.5m
HLD971	Fossey	10000.20	5454.70	676.62	90	-51	185.6m
HLD972	Fossey	10148.51	5653.55	679.24	270	-72	314.8m
HLD973	Fossey	10000.21	5454.14	676.60	90	-61	152.9m
HLD974	Fossey	9950.17	5446.85	679.06	90	-48	203.7m
HLD975	Fossey	10320	5577.5	672.5	90	-65	In Prog. 45m
HLD976	Fossey	10100	5677.5	683.7	270	-70	In Prog. 51m

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

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Assay results for the Quarter are presented in Table 6; highlights include:

• HLD961: 6.9 metres at 13.4% Zn, 8.9% Pb, 37 g/t Ag & 0.37 g/t Au (Figure 7);

• HLD962: 9.1 metres at 13.2% Zn, 8.5% Pb, 373 g/t Ag & 4.1 g/t Au (Figure 7);

• HLD963: 0.15 metres at 23.2% Zn, 13.4% Pb, 338 g/t Ag & 3.4 g/t Au (Figure 5)

• HLD965: 1.7 metres at 6.9% Zn, 3.3% Pb, 64 g/t Ag & 2.9 g/t Au and 2.25 metres at 24.4% Zn, 9.7% Pb, 0.9% Cu, 259 g/t Ag & 4.7 g/t Au (Figure 5) and,

• HLD967: 12.75 metres at 18.5% Zn, 8.8% Pb, 0.6% Cu, 273 g/t Ag & 2.83 g/t Au (Figure 6).

Results for Fossey Zone continue to generally be positive, confirming the interpretation of a large wedge of mineralised barite hosting several zones of massive high-grade base metal sulphide. The 20 diamond drill holes completed to date confirm the strike extent to be at least 170m; from drill line 10100N to 10270N. A moderate southerly plunge to the system is now also apparent – see Figure 4.

Table 6: Fossey Zone Assay Composites	Table 6: Fossey Zone Assay Composites	Table 6: Fossey Zone Assay Composites	Table 6: Fossey Zone Assay Composites	Table 6: Fossey Zone Assay Composites	Table 6: Fossey Zone Assay Composites	Table 6: Fossey Zone Assay Composites
From (m)	To (m)	Drilled Interval (m)	Zn (%)	Pb (%)	Cu (%)	Ag (g/t)	Au (g/t)
HLD961 (at a 5% (Pb+Zn) cutoff)
273.40	279.00	5.60	4.0	1.8	-	11	0.36
281.50	288.40	6.90	13.4	8.9	-	37	0.37
Within a broad zone at 1%(Pb+Zn) cutoff
264.90	288.40	23.50	5.8	3.5	-	17	0.35
HLD962 (at a 5% (Pb+Zn) cutoff)
243.10	252.20	9.10	13.2	8.5	0.5	373	4.10
Within a broad zone at 1%(Pb+Zn) cutoff
235.5	265.7	30.20	5.7	3.4	0.2	153	2.54
HLD963* (at a 5% (Pb+Zn) cutoff)
251.05	251.20	0.15	23.2	13.4	0.6	338	3.38
Which includes significantgold-silver intercepts (at a 1g/t Au cutoff)
190.50	194.50	4.00	0.3	0.1	0.01	25	1.19
229.00	245.00	16.00	0.5	0.1	0.01	28	1.78
HLD965* (at a 5% (Pb+Zn) cutoff)
216.40	218.10	1.70	6.9	3.3	0.4	64	2.89
271.40	273.65	2.25	24.4	9.7	0.9	259	4.67
Lower interval within a significantgold-silver intercept (at a 1g/t Au cutoff)
247.10	273.65	26.55	2.7	1.0	.09	70	1.96
HLD967* (at a 5% (Pb+Zn) cutoff)
236.05	248.80	12.75	18.5	8.8	0.6	273	2.83
Within an interval defined at a 1% (Pb+Zn) cutoff
229.50	250.50	21.00	11.7	5.5	0.4	193	2.12

* Reported to ASX 1 July 2008

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

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The Hellyer Mine Project study is progressing well and the following comments provide a summary update:

Resource Delineation: drilling at Fossey is on track to enable a preliminary Mineral Resource estimate to be completed late in the September Quarter subject to timely receipt of assays.

Mining Assessment: a preliminary review is underway to assess the potential to accelerate commencement of mining at the Fossey Zone and upper Hellyer Remnants. The concept under review is to access resource areas by refurbishment of existing mine infrastructure and then creating underground drive access into the Fossey mineralisation. This could generate a large tonnage sample for toll treatment as well as allow infill drilling of Fossey from underground.

Metallurgy: testwork on 14 samples of Fossey core is being undertaken by Ammtec Burnie Research Lab under the direction of Consulting Metallurgist, Peter Munro of Mineralurgy Pty Ltd. The work comprises detailed mineralogical studies and bench scale flotation tests to assess the likely zinc, lead, copper, silver and gold recoveries. Preliminary results based largely on mineralogical data suggests that Fossey mineralisation is quite distinct from “typical Hellyer” ore types with features suggesting potentially better processing properties. Whilst encouraging, it is early in the process and test work results are expected late in the September Quarter. This will provide data in determining the amenability and commercial potential for utilisation of either the Hellyer or Rosebery processing plants.

Environmental: a key issue is treatment of water extracted from the Hellyer mine void as part of the possible commencement of mining. Several water treatment options are available and under investigation including neutralisation, oxidation and settlement, similar to what the Company is doing at the Que River operations 4km to the south. Several innovative processes which include recovery of zinc are also being examined.

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

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Figure 3: Fossey drill hole location plan & simplified geology

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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

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Figure 4: Schematic Long Section

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Figure 5 Schematic Drill Section – 10,100mN

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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

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Figure 6: Schematic Drill Section – 10, 150mN

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Figure 7: Schematic Drill Section 10,200 mN

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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

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Figure 8: Schematic Drill Section 10,250 mN

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A2.1.3 Oonah (Cu-Pb-Zn-Ag-Sn potential)

(EL63/2004 - 75% Bass Metals Ltd 25% Clancy Exploration Ltd)

The Oonah licence includes several historic high grade lead-silver and tin mines. Bass Metals is initially targeting extensions of this mineralisation and has designed a first-pass reversecirculation (RC) drill-program to test the down dip and along strike potential of the historical Montana Silver-Lead mine.

The Montana Mine is located approximately 5km northwest of the town of Zeehan and was last mined in the 1950’s. The shoot of ore comprised massive galena (Pb-sulphide) veining with dimensions reported as approximately 60 metres in strike-length and 7.5 metres at its widest point. Stoping of the lode reached a depth of 60 metres below surface.

Historical records of sampling within the underground mine include results such as:

• 9.3oz Ag, 13.5% Pb, 1.0% Zn

• 15.7oz Ag, 7.4% Pb, 1.2% Zn, and

• 14.5oz Ag, 10.4% Pb, 1.7% Zn.

While Zn grades are characteristically lower than that of Pb in Devonian vein deposits such as Montana, Magnet (Waratah EL) and Farrell (Tullah EL); Zn-rich ore was avoided as it was considered a contaminant to smelting operations of that time. As such, the Zn potential of the area is unrealised. No drilling has occurred in the vicinity of the mine.

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

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A2.1.4 Waratah (Pb-Zn-Ag potential)

( 75% Bass Metals Ltd 25% Clancy Exploration Limited )

This is a high grade historic lead-zinc-silver mine which according to Mineral Resource Tasmania (MRT) records produced 630,000t grading 5.7% Pb, 7.3% Zn and 394g/t Ag between 1895 and 1940. A drilling programme to test for shallow high grade extensions had to be suspended due to technical drilling issues and will be re-instated as soon as practical subject to the availability of a suitable drill rig.

Results of a VTEM airbourne survey totalling 174 line-km testing conceptual mineralised targets generated by Clancy Exploration Limited (Clancy) were received during the Quarter. Anomalism was detected in the immediate vicinity of the Mt Bischoff Tin Mine Lease (owned by MetalsX Limited) which may represent extensions to the Bischoff tin mineralisation, however no other significant anomalies suggestive of massive-sulphide mineralisation were detected.

A2.1.5 Farrell Line Project (Cu-Pb-Zn-Ag potential)

(EL47/2003 BSM 100%)

The Farrell Line project comprises a historic high grade lead-silver mine occurring approximately halfway between Hellyer and Rosebery. The Mt Farrell-Murchison Mines had significant historic Pb-Ag production of approximately 700,000 tonnes at 13% Pb and 14oz./t Ag.

A first pass drilling program currently awaiting approval by MRT is targeted at high grade mineralisation and zinc potential in shallow and deep extensions of the known mineralised zones not previously tested.

A2.4 EARLY STAGE BASE METALS EXPLORATION

The Company has a very active regional and grass roots base metals focussed exploration programme. During the June Quarter of 2008 the following activities were completed.

A2.4.1 OZ Minerals Hellyer Exploration Alliance (HEA)

(OZ Minerals earning 70%)

OZ Minerals (formerly Zinifex Australia Limited) has a total of 4 Special Project Joint Venture (SPJV) areas, mainly on the Hellyer Mine Lease under the terms of the Hellyer Exploration Alliance (HEA) agreement. They all cover prospective portions of the Hellyer-Que River stratigraphy and include the promising early stage Switchback prospect where strong alteration and anomalous base metal sulphides were intersected during the HEA phase of exploration drilling in 2007.

OZ Minerals commenced drilling on the Highpoint prospect in late July 2008.

2.4.2 Loyetea (Cu-Pb-Zn-Ag potential) (EL51/2004 - 75% Bass Metals Ltd 25% Clancy Exploration Ltd)

A VTEM survey totalling 455.8 line-km was conducted over the southern half of the Loyetea tenement during March. The aim of the program was to test Clancy Exploration targets prospective for either Cambrian Hellyer - Rosebery style VHMS systems or Devonian Moina - Kara granite-related mineralisation systems.

Several anomalies are recognised, however their geological significance and economic potential still requires investigation. The most promising anomaly occurs in an area of known magnetiteskarn occurrence near the contact of the Devonian Housetop granite and Gordon Group Limestone. Historic drilling in the area has intersected typical skarn alteration assemblages but

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

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with only anomalous base metals. The VTEM anomaly is located within 500 metres of the previous drilling and it is possible that this prospective zone was not detected by previous explorers due to less sophisticated geophysical technology at the time. The target is considered “drill-ready” with no further ground-based geophysics required. Drilling of this target is planned for the December quarter.

2.4.3 North Rosebery (Cu-Pb-Zn-Ag-Au potential)

(EL54/2004 - 75% Bass Metals Ltd 25% Clancy Exploration Ltd)

A soil sampling survey north of OZ Minerals Rosebery Mine was completed during the Quarter. A partial acid digest assay is being utilised and all assay results are pending.

2.4.4 Wilmot (Cu-Pb-Zn-Ag potential)

(EL51/2004 - 75% Bass Metals Ltd 25% Clancy Exploration Ltd)

An airbourne VTEM survey comprising 295 line-km was completed over most of the tenement area during the Quarter primarily testing Clancy Hellyer-Rosebery targets in the western portions of the tenements. A subtle anomaly is recognised in the east of the tenement and a follow-up ground geophysical survey (EM) is planned.

A2.4.5 Bonds Range (Cu-Pb-Zn-Ag potential)

(EL28/2002 - 70% Bass Metals Ltd 30% Adamus Resources Limited)

Assay results for the Tiger Plain soil grid, over a sequence of untested Cambrian rocks were received during the June Quarter. No significant anomalism was observed and no further work is proposed for this area. Future activity on this lease will focus on the gold and skarn potential in the Lea River area to the north where there are historical, small-scale gold mining occurrences and the possibility for 'Moina-type' skarn mineralisation.

B. GOLD

The Company continued low level work on its Mt Charter gold Mineral Resource and the Sterling Valley gold project. Further drilling and evaluation work is planned.

C. NICKEL & OTHER METALS

C.1 Heazlewood (Ni-Cu-PGM potential)

(EL31/2003 70% Bass Metals 30% Pioneer Nickel Limited)

This licence is considered prospective for nickel and platinum group metal deposits, based on intrusive-related and carbonate-replacement base metal, and ultramafic/granite contact aureole (Avebury nickel style) deposit styles. Skarn related magnetite mineralisation is also evident in the regional aeromagnetic datasets. This potential was tested in the March Quarter with a 221.1 linekm VTEM survey over the ultramafic complex.

Several anomalies were detected and two were selected for follow-up work on the basis that they either have EM signatures characteristic of a good conductor or are coincident with extensive soil anomalism (e.g. Wilson Soil Anomaly). The Wilson anomaly is inferred to be situated in the axial region of an antiformal fold, analogous to the setting of the Avebury Ni deposit. This anomaly will be tested by diamond-drilling as soon as practical.

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

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A second VTEM anomaly will be tested with a ground geophysical (EM) survey. This anomaly occurs in the vicinity of many alluvial Osmiridium (Platinum Group element PGE) workings and, more importantly, a reported breccia zone within the ultramafic host-rock containing nickelbearing sulphides. Historical records indicate that the breccia zone is "60 metres long and 2.3 metres wide of altered and brecciated dunite containing up to 10% Ni sulphides (Ni content up to 1.23%)". The breccia occurs within a broader zone of PGE anomalism. Although a single follow-up drill hole completed in 1988 failed to detect the sulphide mineralisation at depth, the planned ground EM program will encompass this zone and may enable more precise drilltargeting of prospective zones. This VTEM anomaly (comprising two discrete anomalies) is located within 250 and 750 metres of the reported nickel-sulphide occurrence.

The Company notes that Mincor Resources NL has also recently ( June 2008 Quarterly Report to ASX. ) reported 5 discrete VTEM anomalies on their tenement immediately to the south of Bass Metals’ Heazlewood licence. The geological setting is broadly similar and they regard the anomalies as “valid and high quality exploration targets”.

C.2 Whyte River (Au-Ni-Fe potential)

(EL31/2003 70% Bass Metals 30% Pioneer Nickel Limited)

This lease lies 10km south of the Savage River magnetite iron mine and within the same geological sequence. It also covers a large portion of the Corinna Alluvial gold field and has been subject to historical exploration for both commodities. During the March Quarter historic drill core was located which had been assayed for Au, Ag, As, Cu, Zn, and Pb but not Fe, despite significant intercepts of magnetite. Samples taken in April yielded a best iron result of 44.1% Fe over 5.6 metres.

Iron is not a core focus for the Company and the Company is looking to conclude a joint venture for the iron rights on its leases.

C.3 New Application - Tor Tin Prospect (Sn potential)

The application process is progressing within Mineral Resources Tasmania and it is anticipated that work on this project will begin in the December Quarter.

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.

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

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D. CORPORATE ACTIVITIES

D.1 Financial Position

The Company’s closing cash position at the end of the June Quarter was $4.43 million a $0.38 million reduction from the end of the March Quarter balance of $4.81 million.

The main cash flow components comprised:

Ore sales (provisional payments) $3.55 million Hedge settlements $0.60 million Exploration ($1.07) million Que River Mine development & operating costs ($2.75) million Capital Costs ($0.15) million Corporate administration costs ($0.64) million

The Company’s Working Capital position at the end of the Quarter is $5.46 million, not including the positive value in the liquid hedge position.

Apart from minor leasing and bond commitments, Bass Metals has no debt.

D.2 Hedging

During the June Quarter the Company received $0.6 million in hedge settlements from:

• close out of Put options covering 349 tonnes of zinc and 191 tonnes of lead; and,

• resetting of its foreign exchange option strike price from an exchange rate of 0.92c to 0.96c AUD/USD.

The hedge position has a total marked to market value of approximately $2.7 million as at the end of June 2008.

All of the hedge position comprises purchased Options to create a floor price structure against falling zinc and lead prices and a rising AUD. BSM will continue to benefit from commodity prices increases as and if they occur.

D.3 Capital Structure

Changes to Company’s capital structure during the Quarter comprised the issue of 25,000 shares and 125,000 unlisted options under the Share Purchase Plan and Employee Incentive Option Plan.

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