GREENWING RESOURCES LTD — Interim / Quarterly Report 2012

Oct 24, 2011

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ABN 31 109 933 995
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25 October 2011

The Manager Companies Company Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000

Dear Sir

SEPTEMBER 2011 QUARTERLY REPORT OF ACTIVITIES & CASHFLOW

• Safety – excellent performance with no lost time injury (LTI) period on the Company’s leases extended to 410 days and the Fossey Mine development continuing an LTI free run of 614 days.

• Record development metres achieved in the Fossey mine, with close to budgeted levels of ore production.

• Revised Fossey Ore Reserve and mine plan reconciling closely with the mill feed grades during the quarter.

• Successful mill campaign in August, with concentrate quality significantly improved on June quarter and comprised:

• 6,060t of zinc concentrate grading 53% zinc;

• 2,966t of lead concentrate grading 61% lead; and

• 251t of copper-precious metals concentrate grading 20% copper, 6,317 g/t silver and 19.8 g/t gold.

• Operating costs for mine at budget and mill below budget at $90/t and 48/t respectively.

• Infill drilling at Fossey East completed to 25 metre spacing, confirming high grade potential; e.g. 9.4 metres at 16.4% zinc, 10.3% lead, 1.1% copper, 75 g/t silver and 1.2 g/t gold.

• 7.0 metre drill intersection assaying 22.3% zinc, 9.9% lead, 3.4 g/t gold, 181 g/t silver and 0.7% copper highlights the new McKay discovery.

• Final phase of capital raising process underway with an entitlements offer to raise up to $10.7 million in progress.

• Mining operations continue normally, with 2 milling campaigns (#6 and # 7) planned for the December quarter. The mill is currently half way through campaign #6 with good quality concentrates of zinc and lead being filtered and transported to Burnie.

I am pleased to attach the September 2011 quarterly operating and cash flow report for Bass Metals Ltd (ASX: BSM).

Level 1, 91 Havelock 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 September 2011 quarter has been one of the most difficult and challenging in the Company’s history, but management and the Board have made excellent progress in reestablishing safe and financially sound mining operations, progressing exploration success and advancing a major $25 million fundraising process, now in its final stages.

The mine and mill production and cost figures reported herein clearly demonstrate an operation that has overcome the technical issues which emerged suddenly in early June 2011. Of particular importance is that during that testing time the excellent safety record of the Hellyer site was maintained having passed 410 days Lost Time Injury (LTI) free and the Fossey Mine achieving an LTI free record of 614 days.

The water inflow issues which emanated in early June have reduced considerably with dewatering rates currently at 140 litres per second (l/s) well below the installed dewatering capacity of 300l/s. Likewise the grade underperformance has been addressed through the detailed infill drilling program and mine plan revisions with very close reconciliation between the mine and mill figures indicating a robust lower risk mine plan. Overall, Bass Metals’ management and operational team responded magnificently to these sudden and unexpected events, but unfortunately given the scale of the operations, the adverse cash flow impact has required a major fund raising effort to ameliorate, which is in its final stages.

Operational performance in the mine has been excellent and in accordance with the revised mine plan. Production from the Fossey underground mine progressed well with 97,879 tonnes of ore produced during the quarter, though 11% less than the previous quarter’s production, but at higher grades. The mine development and production continues well into October, with ore being sourced from the 465 and 445 levels to setup milling campaign commencing in late November.

The fifth milling campaign completed in August achieved overall positive production results. The start-up was particularly pleasing, with first concentrates being recovered within 70 hours of commencement of processing. Zinc and lead concentrate production results were very encouraging with good quality, high-grade concentrates produced. Whilst copper concentrate tonnage was significantly down on plan, payable metal grades were higher than planned and copper recovery is expected to improve in the next two campaigns with circuit modification scheduled to be completed in October.

Several outstanding exploration results were achieved for the quarter, notwithstanding the low level of drilling activity. The high-grade intercept at Mackay of seven metres at 22.3 % zinc, 9.9 % lead, 0.7 % copper, 181 g/t silver and 3.4 g/t gold may have identified a new mineralised zone, but more importantly validates a new exploration model and opens up large tracts of ground not previously interpreted as prospective. At Fossey East, further high grade intercepts were made as part of the 25 metre spaced infill drilling program and the outlook for a high-grade extension to the Fossey mine is promising.

The closing cash position at the end of the quarter was $4.99 million, with 67,000 tonnes of high grade ore stockpiled ready to process. Operations recorded a negative cash flow for the quarter, the result of the single milling campaign in August, payment of an extra month mining invoice held over from the June quarter and additional operating costs related to managing technical problems in the mine that occurred in June 2011. Operations are forecast to provide positive cash flows from the next quarter.

Level 1, 91 Havelock 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 Company is pleased to have received the support of its banker, RMB Australia Holdings, through a $13 million extension to its existing facilities. This comes on the back of an extensive due diligence process involving external consultants and certainly endorses the Board’s view on the cash generating potential of the robust, high-grade Fossey Ore Reserve. The Company is in the final stages of its overall fund raising strategy comprising a 1 for 3 non-renounceable entitlements offer to raise up to $10.7 million. The Offer closes at 5:00pm (Perth time) on 26 October 2011, with a minimum subscription requirement of $8 million.

The Board and management of Bass Metals consider that the Company has strong, realistic production plans in place to support a number of very exciting growth opportunities. The recent McKay discovery, following within 12 months of the Fossey East discovery, is a clear validation of the Company’s new exploration models and strategy and emphasises the under explored nature of the Hellyer-Que River area. Preliminary gold recovery testwork results support further strenuous effort to thoroughly assess the viability of a new large scale gold production profile alongside its existing polymetallic (copper-lead-zinc-silver-gold) production activities at Hellyer. Despite a production setback the Company is now poised to deliver growth from its highly prospective exploration acreage and from its significant gold resources, both underpinned by steady mine production and emerging cash flow.

On behalf of the Board and employees I look forward to providing further updates on the Company’s plans as well as reporting further news on production and exploration activities.

Yours faithfully

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Mike Rosenstreich Managing Director

Competent Persons Statement

Mineral Resources & Exploration Results

The information within this report that relates to exploration results and Mineral Resource estimates is based on information compiled by Mr Kim Denwer and Mr Michael Rosenstreich who are both full time employees of the Company. Mr Rosenstreich is a Member of The Australasian Institute of Mining and Metallurgy and Mr Denwer is a Member of the Australian Institute of Geoscientists. They both, individually have 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(s) as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)” and they consent to the inclusion of this information in the form and context in which it appears in this report.

Ore Reserves

The information in this report that relates to the Fossey Ore Reserve estimates is based on information compiled by Mr Victor Rajasooriar who is a full time employee of the Company and a Member of the Australasian Institute of Mining and Metallurgy. Mr Rajasooriar has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Mineral Resources and Reserves (the JORC Code)”. Mr Rajasooriar consents to the inclusion in this report of the matters based on this information in the form and context in which it appears .

Level 1, 91 Havelock 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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SEPTEMBER 2011 QUARTERLY ACTIVITIES REPORT

1.0 SUSTAINABILTY

1.1. SAFETY

There were no lost time injuries (LTI) on the Company’s mining operations and exploration sites during the quarter. The Hellyer mining operations recorded 410 LTI free days, with the Fossey Mine achieving 614 days LTI free as at the end of the September quarter; which is a reflection of the commitment from crews and management towards maintaining a safe working environment.

1.2 ENVIRONMENT

There were no material environmental incidents during the quarter on any Bass Metals’ managed tenements. At Que River only minor civil works are now required to complete the care and maintenance rehabilitation program.

1.3 HUMAN RESOURCES

Mr. Richard Holder was appointed to the position of General Manager Tasmanian Operations on 10 October 2011. Permanent vacancies remain for experienced mining and exploration geologists, with gaps temporarily filled by contractors.

2. OPERATIONS

2.1 HELLYER MINE PROJECT (HMP)

Full production statistics for the September quarter and the previous (June) quarter are presented in Table 1 and additional commentary in the following section.

2.1.1 Mine Production

During this period mine development was extended to the 435 level and the 510 level, with the highest development metre advance achieved during this quarter since start-up. The 435 level development will be utilised as a permanent large scale water pumping station. Ore was produced from three stopes on the 465 and 445 levels. At the end of the quarter the dewatering issue is being well managed with a discharge rate of 140 l/s, well within the 300 l/s installed capacity, currently being permanently upgraded.

The revised mine plan for the updated Fossey Ore Reserve is reconciling closely with actual production from the Mill. For example:

• The budget plan for the sixth campaign comprised treating 67,000 tonnes grading 7.8% zinc, 4.6% lead, 0.3% copper, 79 g/t silver and 1.6 g/t gold;

• The estimate of the stockpiled ore mined during September consists of 67,000 tonnes grading 9.1% zinc, 5.3% lead, 0.4% copper 101 g/t silver and 1.9 g/t gold;

• As at the end of the 18 October, an estimate of ore treated through the Hellyer Mill comprises 33,000 tonnes grading 8.7% zinc, 5.1% lead, 0.4% copper, 91 g/t silver and 1.8 g/t gold.

The early indicative positive grade reconciliations are encouraging and supportive of the revised mine plan underpinning the current budgets.

Level 1, 91 Havelock 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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Table 1: HMP Production Summary

Description	UoM	June Qtr Actual	Sept Qtr Actual	Sept Qtr Budget	Variance to prior **Qtr **	Variance to Budget
MINE PRODUCTION (T&G) Underground Development Mine Ore Production Zinc Lead Silver Gold Copper	m t % % g/t g/t %	586 109,607 7.6% 3.9% 113 2.0 0.25%	778 97,879 9.6% 5.6% 110 1.6 0.45%	654 99,606 9.1% 5.3% 90 1.8 0.40%	33% -11% 27% 45% -2% -18% 76%	19% -2% 6% 5% 23% -10% 11%
PROCESSING (T&G) Ore Treated Concentrator Feed Grades Zinc Lead Silver Gold Copper	t % % g/t g/t %	89,213 5.7% 3.3% 102 2.05 0.20%	52,863 8.9% 5.7% 118 1.85 0.44%	52,015 9.7% 5.6% 99 1.90 0.45%	-41% 57% 70% 16% -10% 125%	2% -8% 1% 19% -3% -2%
CONCENTRATE PRODUCED (T&G) Zinc concentrate zinc grade silver grade gold grade Lead concentrate lead grade silver grade gold grade Copper-Precious metals concentrate copper silver gold lead	t % g/t g/t t % g/t g/t t % g/t g/t %	7,602 48% 154 1.1 3,491 51% 697 2.9 376 18% 6,352 12.8 11%	6,060 53% 169 1.1 2,966 61% 641 1.2 251 20% 6,317 19.8 8%	6,858 52% 150 2.4 3,292 58% 478 2.3 563 17% 4,259 9.0 7%	-20% 10% 10% -1% -15% 20% -8% -59% -33% 9% -1% 55% -24%	-12% 3% 13% -55% -10% 5% 34% -50% -55% 17% 48% 119% 24%

Mining activities at site are progressing on schedule and consistent with budget. A new stockpile of ore comprising approximately 18,000 tonnes of ore has already been accumulated in preparation for the seventh milling campaign planned to commence in late November.

The cost per tonne of ore mined for the quarter is $90/t, slightly above the budgeted cost of 87/t.

2 .1.2 Hellyer Concentrator Operations

The performance of the 1.5 mtpa capacity Hellyer Mill has continued to improve with each campaign in terms of both availability and concentrate production. This performance is reflected in Figures 1 to 4 which are summaries of ore processed, zinc, lead and copper concentrate production. These figures, for the fifth (August) campaign, are now fully reconciled metallurgically, following the depletion of all stock tanks and concentrate filtering.

Level 1, 91 Havelock 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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One mill campaign, the fifth, was completed during the September quarter processing 52,863 tonnes of ore. Zinc and lead concentrate production results were very encouraging with good quality, high-grade concentrates produced.

While copper concentrate tonnage was down on plan, payable metal grades were higher than planned and copper recovery is expected to improve in the next campaign. Lower copper recovery was due to adverse affects of several optimisation trials to improve overall copper recovery and attempts to reduce the levels of lead and zinc in the copper concentrate. It was always planned to tackle the copper circuit during this campaign, in the same manner the lead circuit was optimised in the previous campaign. However, the addition of new reagents and further changes significantly destabilised the circuit reducing copper recovery overall. Recoveries are expected to improve during campaigns six and seven, with the addition of the copper regrind mill to the circuit and resolution of the reagent regime.

The gold content in the lead and the zinc concentrate is lower compared to budget. Much of the gold is refractory, i.e. encapsulated in pyrite; this can vary dependant on the ore zones being mined and therefore recoveries can vary between the different concentrates. The pyritic gold is more readily floated during copper recovery and hence the content of gold in the copper concentrate is more than doubled compared to budget.

The cost per tonne of ore milled for the quarter is $48/t, 33% below the budgeted cost of $71/t; which includes all of the fixed costs incurred during the non-milling periods.

During the December quarter two milling campaigns are scheduled (in October and December) to treat a total of 136,000 tonnes of ore. The sixth (October) campaign is currently half way completed with good quality concentrates of zinc and lead being filtered and transported to Burnie. Copper-precious metals concentrate is being stockpiled at site until there is a minimum parcel to containerise and ship.

2.1.3 Concentrate Sales & Marketing

The Company has zinc and lead concentrate sales agreements with Nyrstar Sales and Marketing AG for production from its Fossey and Fossey East deposits, and agreements with LN Metals International Limited for the copper-silver-gold concentrate for concentrate production sourced from the Fossey deposit, Fossey East and potential bulk lead-zinc concentrate production from retreatment of the Hellyer Tails.

During the quarter all lead concentrate produced was sold; 5,311 tonnes, or 88%, of zinc concentrate was sold; and 190 tonnes, or 76%, of copper concentrate was sold. Unsold concentrate was the result of minor disruptions in shipping schedules, and these concentrates will be shipped in the December quarter.

The first shipment of 545 tonnes the copper-precious metals concentrates took placed during the quarter.

Total invoicing for the quarter was $14.31 million.

Level 1, 91 Havelock 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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Figures 1 to 4: Graphical Summaries of Mill Performance per Campaign

Processed Tonnes and Grade (Pb+Zn)

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60,000 16%
50,000 14%
12%
40,000
10%
30,000
8%
20,000
6%
10,000 4%
0 2%
Campaign #1 Campaign #2 Campaign #3 Campaign #4 Campaign #5
(August 2011)
Ore Treated Pb+Zn Grade
Lead concentrate produced
3,500 62%
60%
3,000
58%
2,500
56%
2,000 54%
1,500 52%
50%
1,000
48%
500
46%
0 44%
Campaign #1 Campaign #2 Campaign #3 Campaign #4 Campaign #5
(August 2011)
Lead concentrate lead grade
Tonnes
Tonnes
Conc. Grade
Pb+Zn Head Grade
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Zinc concentrate produced

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7,000
54%
6,000
52%
5,000
50%
4,000
48%
3,000 46%
2,000 44%
1,000 42%
0 40%
Campaign #1 Campaign #2 Campaign #3 Campaign #4 Campaign #5
(August 2011)
Zinc concentrate zinc grade
Copper concentrate produced
300 20%
250
18%
200
16%
150
14%
100
12%
50
0 10%
Campaign #1 Campaign #2 Campaign #3 Campaign #4 Campaign #5
(August 2011)
Copper-Precious metals concentrate copper grade
Conc. Grade
Tonnes
Tonnes
Conc. Grade
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Level 1, 91 Havelock 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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2.2 QUE RIVER MINE

The Que River Mine site is on a care and maintenance regime with the final stages of rehabilitation work in progress. This involves construction of a small dam to manage potential acid mine drainage events. Total works are expected to be completed in the December quarter.

3. SPECIAL PROJECTS

Two feasibility studies are in progress focussed on the recovery of base and precious metals from the Hellyer Tailings.

3.1 BASE-METALS RECOVERY STUDY

This study is focussed on fully utilising the 1.5 mtpa capacity Hellyer Mill by reprocessing the Hellyer Tailings to recover either a bulk lead-zinc concentrate or separate lead and zinc concentrates. The testwork to undertake the later has been completed and is being evaluated, though as stated previously the results are not encouraging. Production of a bulk lead-zinc concentrate remains an option, however it is sensitive to lead and zinc prices. This evaluation is on-going, and the Company recently entered into a Letter of Intent with LN Metals International Ltd to market this material on its behalf in China. This is an opportunity to fully utilise the Hellyer Mill between Fossey ore and tailings, and the Company is positioning itself to be able to respond quickly when metal prices and smelter availability make the operation profitable.

3.2 GOLD RECOVERY STUDY

The Company is pleased to report that positive preliminary results have been obtained from a major, first stage testwork program associated with the current study concerning the potential recovery of gold and silver from the refractory Hellyer Tails. A summary of the preliminary testwork results for different process methods and different feed stocks tested is presented in Table 2. The feed stock types comprise either “whole” tailings or a bulk concentrate derived from a flotation preconcentration phase which reduced the mass by 30% and retained 95% of the valuable metal content.

Table 2: Gold testwork summary of interim results

Process Option	Feed type	Process steps	S oxid.%1	Au rec%	Ag rec%
Direct leach	Tailings	Direct cyanidation	0	5	22
	Tailings	Finegrind-cyanidation	0	9	26
	Bulk conc.	Finegrind-cyanidation	0	32	49
Pressure Oxidation	Tailings	Pressure oxidation-cyanidation	63	84	6
	Tailings	Pressure oxidation-Lime Boil – cyanidation	63	83	tbd2
	Tailings	Fine grind-Pressure oxidation- cyanidation	39	41	19
	Bulk conc.	Pressure oxidation-cyanidation	55	50	43
	Bulk conc.	Fine grind-Pressure oxidation- cyanidation	75	46	61
Albion	Bulk conc.	Fine grind-Albion oxidation- cyanidation	82	92	86
LeachOx	Bulk conc.	Fine grind-LeachOx process- cyanidation	32	37	36
Roasting	Bulk conc.	Roasting-cyanidation	68	34	31

1. “S oxid” refers to the degree of sulphide oxidation.

2. “tbd” to be determined – this test work is ongoing.

Level 1, 91 Havelock 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 gold is refractory because it is largely comprised of fine grains encapsulated within sulphide minerals such as pyrite. Therefore “S Oxid” in Table 2 indicates the degree to which these minerals have been broken down by the respective processes tested, which are designed to break down the sulphide minerals to expose the gold to leaching cyanide solutions.

These results are considered an encouraging indicator of the potential to establish a large scale gold production facility at Hellyer based initially on reprocessing the Hellyer tailings. Latest results indicate that the Albion process generated the highest extraction of gold and silver from the complex tailings material. Pressure oxidation test work for silver recovery continues with varying retention times being tested to minimise lime consumption. This test work is near completion with the final stage of metallurgical accounting currently being carried out and the test work process being audited prior to final results being released.

Estimates of capital and operating costs to a pre-feasibility study level are currently being carried out for each of the processes. The cost estimates will be further reviewed by engineering groups with specialist knowledge of the tested process routes. This phase is the next step toward selecting a single process route for further definitive testwork and engineering studies.

4.0. EXPLORATION

4.1 Hellyer-Que River Exploration

During the quarter, the Company made an exciting discovery at the McKay Prospect with a drill hole intersection of seven metres at 22.3% zinc, 9.9% lead, 0.7% copper, 181 g/t silver and 3.4 g/t gold. This drill hole was not only a very high grade discovery hole; it is also located deep in the alteration zone and confirms a new target zone prospective for mineralisation not tested by previous drilling programs. Drilling from underground on the Fossey East deposit was completed, which increased the drill density to nominal 25 metre centres. One of the highlights for the recent results are from FUD81 which intersected 9.4 metres at 1.1% copper, 10.3% lead, 16.4% zinc, 75 g/t silver and 1.2 g/t gold. Eleven diamond drill holes totalling 2,630 metres were completed for the period (Table 3). Bass Metals’ current tenements are shown in Figure 5 and the major prospect locations on the Mine Leases are shown in Figure 6.

4.1.1 McKay Prospect

Five drill holes have been completed to date for 1,813 metres (Tables 3 and 4) into the new alteration and mineralised zone at the McKay Prospect. The zone has been defined over a vertical extent of at least 60 metres on one section, with one central high grade base metal zone in HLD 1030 and a confirmatory high grade base metal result to the south in hole HLD1033 which intersected 1.65 metres of very high grade mineralisation (1.65 metres at 21.9% Zn, 14.7% Pb, 1.0% Cu, 182 g/t Ag and 2.3 g/t Au). Drill hole HLD 1035 is in progress to test further down- dip to the south (Figure 7).

A new mineralised zone has been discovered with strong similarities to Fossey East which confirms that there is a target zone deeper within the alteration system. There is potential up-dip for a Fossey target closer to the conventional target horizon. Further drilling is planned as a high priority, subject to funding levels.

4.1.2 Fossey East

A total of 13 diamond drill holes (FUD66-76 and 81-82) for 2,368 metres (Figure 5) were drilled from underground for completion of the 25 metre spaced infill drilling program at Fossey East. Assays and drill hole details for these 13 holes are in Table 3 and 5. Mine drilling in the lower parts of Fossey overlap into Fossey East and these results are outstanding.

Level 1, 91 Havelock 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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Highlights for the recent results are from FUD81 which intersected 9.4 metres at 1.1 % copper, 10.3% lead, 16.4% zinc, 75 g/t silver and 1.2 g/t gold, then seven metres of low grade barite followed by a 2.0 metre intersection of 0.3% copper, 3.6% lead, 6.6% zinc, 77 g/t silver and 1.9 g/t gold. The closer spaced drilling has allowed recognition of a zone of low grade barite occurring centrally to two zones of base metal sulphide mineralisation. This was not evident at the wider 50 metre spaced drilling.

4.1.3 D-Zone – Que South

The D-Zone and Que South target areas (Figure 6) have long been recognised as significant alteration zones. In Bass Metals’ recent geochemical and SWIR surveys, both prospects were highly anomalous in all criteria, including pathfinder elements. Historic stratigraphic analysis interpreted much of this alteration to occur in the footwall well below the ore forming horizon. The new understanding that Fossey East and McKay zones occur deep within the footwall alteration zone opens up large tracts for additional exploration, previously considered non-prospective. Drilling programs to systematically test these zones, now regarded as high-priority targets are currently being designed.

Table 3: Drill hole collar details

Hole ID	Grid North**	Grid East	Azimuth	Dip	Depth (m)
HLD1030	10279.2	5863.0	264	-68	470.8
HLD1031	10279.1	5861.9	264	-65	311.8
HLD1032	10281.1	5877.8	264	-71	374.0
HLD1033	10278.8	5864.8	253	-68	317.5
HLD1034	10280.0	5878.0	250	-68	338.5
FUD0066	10095	5694	264	-36	180
FUD0067	10095	5694	294	-30	172
FUD0068	10095	5694	287	-44	162
FUD0069	10095	5694	273	-43	160
FUD0070	10095	5694	273	-34	165
FUD0071	10095	5694	310	-45	181
FUD0072	10095	5694	307	-53	191
FUD0073*	10095	5694	313	-65	121
FUD0074*	10093	5693	245	-42	176
FUD0075*	10094	5694	274	-62	191
FUD0076*	10096	5694	320	-52	206
FUD0081*	10095	5693	287	-54	191
FUD0082*	10095	5693	291	-47	171

**-Hellyer Mine grid is orientated at 22.1 degrees to AMG

Table 4 - Drill hole intersections - McKay Prospect

		Drilled Interval (m)	Est. True Thickness (m)
				Zn (%)	Pb (%)	Cu (%)	Ag (g/t)	Au (g/t)
From (m)	To (m)
HLD1030(at > 5%(Pb+Zn) cut-off)
276.7	283.7	7.0	4.9	22.3	9.9	0.7	181	3.4
Within a zone(defined by barite alteration)
276.7	287.8	11.1	7.8	14.9	6.5	0.5	130	2.6
HLD1031 (at > 5% (Pb+Zn) cut-off)- no significant intercepts
Within a zone(defined by barite alteration)

Level 1, 91 Havelock 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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257.25	270.3	13.05	11.0	0.6	0.4	<0.1	12	1.4
HLD1032 (at > 5% (Pb+Zn) cut-off)- no significant intercepts
HLD1033(at > 5%(Pb+Zn) cut-off) - no significant intercepts
296.35	298.0	1.65	1.2	21.9	14.7	1.0	182	2.3
HLD1034 (at > 5% (Pb+Zn) cut-off)- no significant intercepts

Table 5 - Drill hole intersections - Fossey East (June-July 2011)

		Drilled Interval (m)	True Thickness (m)
				Zn (%)	Pb (%)	Cu (%)	Ag (g/t)	Au (g/t)
From (m)	To (m)
FUD0066(at > 5%(Pb+Zn) cut-off)
113.4	119	5.6	4.9	14.7	5.4	0.7	109	2.1
Within a zone(defined by barite alteration)
113.4	135.4	22	19.5	4.7	1.7	0.2	45	0.9
FUD0067 (at > 5% (Pb+Zn) cut-off)- no significant intercepts
Within a zone(defined by barite alteration)
119	130	11	9	0.7	0.3	0.0	19.5	0.7
FUD0068 (at > 5% (Pb+Zn) cut-off)- no significant intercepts
Within a zone(defined by barite alteration)
120	134	14	13.5	1.1	0.3	0.1	39	1.5
FUD0069 (at > 5% (Pb+Zn) cut-off)
114.6	116.4	1.75	1.7	8	3.3	0.4	38	2.4
134.2	136.5	2.3	2.3	17.7	8.0	0.6	235	4.3
Within a zone(defined by barite alteration)
111.6	136.5	24.9	24	3.1	1.2	0.1	49	1.9
FUD0070 (at > 5% (Pb+Zn) cut-off)
103	106	3	3	9.6	3.0	0.3	39	1.9
Within a zone(defined by barite alteration)
102	128.9	26.9	26	2.1	0.8	0.1	40	1.0
FUD0072 (at > 5% (Pb+Zn) cut-off)
120.2	124.4	4.2	4.0	16.6	8.8	2.2	71	0.9
FUD0073 to FUD0076 (at > 5% (Pb+Zn) cut-off)- no significant intercepts
FUD0081 (at > 5% (Pb+Zn) cut-off)
129.6	139.0	9.4	7.2	16.4	10.3	1.1	75	1.2
146.0	148.0	2.0	2.0	6.6	3.6	0.3	77	1.9
Within a zone(defined by barite alteration)
129.6	149.0	19.4	17.0	8.9	5.5	0.5	51	1.0
FUD0082 (at > 5% (Pb+Zn) cut-off)
123.3	127.0	3.7	3.6	8.6	4.3	0.4	55	1.8
Within a zone(defined by barite alteration)
123.3	136.2	12.9	12.5	3.0	1.4	0.1	39	1.1

Level 1, 91 Havelock Street, WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846

www.bassmetals.com.au

==> picture [107 x 40] intentionally omitted <==

4.2 REGIONAL EXPLORATION

Bass Metals’ current regional tenement position is shown in Figure 5. During this period the only regional exploration undertaken was an MMI soil sampling program on the Lake Margaret Exploration Licence (75% Bass & 25% Clancy Exploration).

No work was undertaken by the Company or its joint venture partners on the other regional licences.

Figure 5: Current tenement holdings.

==> picture [381 x 549] intentionally omitted <==

Level 1, 91 Havelock Street, WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846

www.bassmetals.com.au

==> picture [107 x 40] intentionally omitted <==

Figure 6: Hellyer-Que River mining licences, locality map and major prospects.

==> picture [241 x 349] intentionally omitted <==

• Figure 7: Long section showing McKay actual and proposed drilling.

==> picture [237 x 306] intentionally omitted <==

Level 1, 91 Havelock Street, WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846

www.bassmetals.com.au

==> picture [107 x 40] intentionally omitted <==

Figure 8: Schematic Long Projection showing the location of all the Fossey East intercepts

==> picture [272 x 344] intentionally omitted <==

5.0 CORPORATE

The focus of the Company during the quarter was to complete a fund raising process targeted to raise a total of $25 million. This follows geological and mining setbacks which occurred suddenly at its Hellyer Mine operations in early June 2011. The Directors consider these issues are now remedied and that the Company has taken all appropriate measures to minimise the potential likelihood and impacts of any similar style events recurring.

The objective of the overall fundraising is to place the Company’s operations completely “back on track” and ensure an adequate working capital buffer for a business of the scale of the Hellyer Mine Project whilst providing sufficient funding for:

• general working capital;

• an aggressive exploration program across its highly prospective land holding around the Hellyer Mill; and

• full evaluation of the potential to recover gold from the Hellyer Tailings.

• The financing structure and process implemented during the quarter comprises:

• $4.3 million issue of convertible and loan notes (announced to ASX on 8 August 2011);

• $13 million extension to existing debt facilities (announced to ASX on 9 September 2011); and

• Up to $10.7 million through a non-renounceable entitlements issue to shareholders (announced to ASX on 15 September 2011).

Level 1, 91 Havelock Street, WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846

www.bassmetals.com.au

==> picture [107 x 40] intentionally omitted <==

5.1 CONVERTIBLE AND LOAN NOTES

On 8 August 2011 Bass Metals announced it had raised a total of $4.3 million (before costs) through the issue of 3.3 million convertible notes and $1 million of loan notes on arm’s length terms from Director-related entities.

Each convertible note and loan note has a face value of $1.00, a conversion price of $0.15 per share and a free attached option. The 3.3 million convertible notes issue was completed under the Company’s available 15% placement capacity to professional and sophisticated investors with the attached option issue being subject to shareholder approval.

At a general meeting of shareholders held on 26 September 2011, shareholders ratified the issue of the 3.3 million convertible notes and approved the conversion of the loan notes and the issue of the free attaching options to convertible note and loan note holders.

5.2 DEBT LIMIT EXTENSION

RMB Australia Holdings Ltd (RMB) has agreed to extend its existing Corporate Loan facility by $13 million. At the date of this report, the Company had drawn $9 million of the new $13 million increased limit and after making scheduled repayments the current loan position stands at $23.2 million. The debt facility with RMB is due to be repaid progressively by 30 June 2014. This offer to increase its existing facilities from RMB follows an extensive due diligence process which included an independent technical review of the revised Fossey Mine plan by Snowden Mining Industry Consultants.

The RMB offer is conditional on standard conditions precedent, including a requirement for the Company to raise a minimum of $8 million in new equity and the issue to RMB of up to a total of 86.7 million Lenders Options, which will be subject to shareholder approval. The Company was able to draw down $9 million of the $13 million extension amount prior to the completion of the equity raising, with the balance being available thereafter. Bass Metals is required to issue 21.7 million options for the initial drawdown and 5 million options for every $1 million drawn down thereafter on the $13 million extension to the Corporate Loan facility. The Lender Options will have an exercise price of either 20 cents or a 20% premium to any equity offer price, whichever is the lower, and expire on 30 September 2014.

5.3 NON-RENOUNCEABLE ENTITLEMENTS OFFER

On 15 September 2011, Bass Metals announced an entitlement offer to existing eligible shareholders to subscribe for one new share plus one free attaching option for every three existing shares held via a non-renounceable entitlements offer (“Offer”).

The price for each new share shall be $0.15 and the free attaching option, which is planned to be listed on the ASX, will have an exercise price of $0.20 each and will expire on 30 September 2014.

The pricing of both the new shares and the new options are identical to the prices and terms that applied to the subscribers for the convertible notes and loan notes (refer section 5.1 above).

The minimum raising under the Offer shall be $8 million and if fully subscribed the total amount raised (before costs) would be $10.7 million.

The Offer will include the opportunity for shareholders to subscribe for new shares (with attaching options) in excess of their entitlement and the Company will also reserve the right to place any shortfall of new shares with attaching new options.

Level 1, 91 Havelock Street, WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

==> picture [107 x 40] intentionally omitted <==

The purpose of the equity issue is to provide additional funds to maintain the planned major exploration program, complete the Gold Recovery Project feasibility study and for general working capital.

The Board considers that this financing structure, which is now in the final stages of implementation, is a very good outcome for all shareholders in a difficult financial market environment.

5.4 FINANCIAL POSITION

5.4.1 Cash

Cash on hand at the end of the quarter was $4.99 million plus receivables of $1.62 million, or a total of $6.61 million in current liquid assets. The movement in current liquid assets during the quarter was primarily due to:

• Exploration expenditure of $0.71 million; and

• Mine development and equipment expenditure of $1.87 million.

It should be noted that due to the Company’s campaign milling schedule there was also a 67,000 tonne stockpile of high grade ore at the Hellyer Mill ready for processing.

5.4.2 Debt

The Company had debt at the end of the quarter of $23.41 million, comprising the RMB debt facility of $20.2 million, a silver loan of $2.95 million and lease obligations of $0.26 million.

5.4.3 Hedging

The following table summarises the Company’s hedging position at the end of the quarter:

Metal	Tonnes/ Ounces	Weighted Average Price (AUD)
Lead	6,437	$2,410
Zinc	10,439	$2,460
Silver	451,000	$26.20

The hedge position will be settled by 30 June 2012.

5.5 CAPITAL STRUCTURE

During the quarter the Company issued:

• 3,300,000 unlisted convertible notes expiring on 8 August 2014 convertible into shares at a conversion price of $0.15 per share;

• 600,000 unlisted options under the Bass Metals Ltd Performance Incentive Plan (approved by shareholders on 30 November 2010) to a senior employee pursuant to the terms of their employment agreement with the Company;

• 28,666,667 unlisted options to convertible note and loan note holders as approved by shareholders at a general meeting of shareholders held on 26 September 2011; and

• 6,666,667 fully paid ordinary shares on conversion of loan notes held by Director related holders as approved by shareholders at a general meeting of shareholders held on 26 September 2011.

Level 1, 91 Havelock Street, WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846

www.bassmetals.com.au

==> picture [107 x 40] intentionally omitted <==

As at 30 September 2011, the Company had 220,097,490 fully paid ordinary shares, 3,300,000 unlisted convertible notes and 46,486,667 unlisted options on issue.

5.6

CONTINUING SUSPENSION

It is the Board’s intention to request that ASX keep the Company’s shares suspended until some degree of certainty surrounding the entitlements offer has been achieved. While the Board is confident that the entitlements offer will be successful, it considers that reinstatement of trading in the Company’s shares before this certainty is reached makes it difficult for the market to properly assess or value the Company’s shares and reinstatement of the Company’s shares is likely to be materially prejudicial to the Company’s ability to successfully complete the entitlements issue which is critical to the Company’s continued financial viability. Based on the current timetable for the entitlements issue which was released to ASX on 10 October 2011, the Company will apply for re-quotation of the Company’s ordinary shares on 4 November 2011.

Level 1, 91 Havelock Street, WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 9322 8044 Facsimile (08) 9481 2846 www.bassmetals.com.au

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B Mining exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

Bass Metals Ltd

Quarter ended (“current quarter”) 30 September 2011

	ABN 31 109 933 995 Consolidated statement of cash flows		Quarter ended (“current quarter”) 30 September 2011
			30 September 2011
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other cash flows (including GST, Corporate Affairs and Capital Raising Costs) Net Operating Cash Flows		Current quarter $A’000		Year to date (3 months) $A’000
		15,543 (712) (1,715) (20,425) (1,586) - - (343) - (225)		15,543 (712) (1,715) (20,425) (1,586) - - (343) - (225)
		(9,463)		(9,463)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities- 1.11 Loans repaid by other entities 1.12 Other – Hedging Settlements Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - (151) - - - - - (579)		- - (151) - - - - - (579)
		(730)		(730)
		(10,193)		(10,193)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(10,193)	(10,193)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings (net) 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows	3,984 - 8,350 (3,510) - -	3,984 - 8,350 (3,510) - -
	8,824	8,824
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	(1,369) 6,355 -	(1,369) 6,355 -
	4,986	4,986

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

1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
	151
	-

• 1.25 Explanation necessary for an understanding of the transactions

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.

Appendix 5B Page 2

17/12/2010

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount available $A’000	Amount used $A’000
		27,154	23,154
		Nil	Nil
Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration & Financing			$A’000
			1,639
			950
			9,795
			3,921
Total			16,305

Reconciliation of cash

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 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	4,928	6,313
	58	79
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	4,986	6,392

Changes in interests in mining tenements

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

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

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 ($)	Amount paid up per security ($)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	220,097,490	220,097,490
	6,666,667	6,666,667	0.15	0.15
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	3,300,000	3,300,000	1.00	1.00
	3,300,000	3,300,000	1.00	1.00

• See chapter 19 for defined terms.

Appendix 5B Page 4

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Appendix 5B Mining exploration entity quarterly report

7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter 7.11 Debentures (totals only) 7.12 Unsecured notes(totals only)	1,375,000 225,000 425,000 250,000 1,055,000 400,000 400,000 200,000 300,000 300,000 300,000 950,000 3,000,000 1,090,000 200,000 200,000 200,000 150,000 150,000 150,000 5,900,000 200,000 200,000 200,000 28,666,667	- - - - - - - - - - - - - - - - - - - - - - - - -	Exercise price 27.5 cents 37.5 cents 51.0 cents 37.5 cents 42.5 cents 25.0 cents 35.0 cents 50.0 cents 26.0 cents 28.5 cents 30.5 cents 30.0 cents 22.8 cents 22.0 cents 20.5 cents 29.0 cents 41.0 cents 43.5 cents 61.0 cents 88.0 cents 31.8 cents 26.0 cents 36.5 cents 52.5 cents 20.0 cents	Expiry date 22.12.11 31.12.11 31.12.12 2.11.11 16.10.12 1.9.13 1.9.13 1.9.13 31.12.12 31.12.12 31.12.12 31.12.12 22.9.13 5.7.13 11.10.14 11.10.14 11.10.14 31.1.15 31.1.15 31.1.15 27.5.14 27.8.15 27.8.15 27.8.15 30.9.14
	200,000 200,000 200,000 28,666,667	- - - -	26.0 cents 36.5 cents 52.5 cents 20.0 cents	27.8.15 27.8.15 27.8.15 30.9.14
	-	-	-	-
	90,000 200,000 200,000 200,000 140,000	- - - - -	42.5 cents 25.0 cents 35.0 cents 50.0 cents 22.0 cents	16.10.12 1.9.13 1.9.13 1.9.13 5.7.13

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

• 2 This statement does give a true and fair view of the matters disclosed.

==> picture [109 x 59] intentionally omitted <==

Sign here: ............................................................ Date: 25 October 2011 (Director/ ~~Company secretary)~~

Print name: Michael Rosenstreich Managing Director

Notes

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms.

Appendix 5B Page 6

17/12/2010