GREENWING RESOURCES LTD — Interim / Quarterly Report 2011

Jul 31, 2011

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ABN 31 109 933 995
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29 July 2011

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

Dear Sir

JUNE 2011 QUARTERLY REPORT OF ACTIVITIES & CASHFLOW

• Safety – excellent performance with no lost time injury (LTI) period on the Company’s leases extended to 318 days and the Fossey Mine development continuing an LTI free run of 523 days.

• Fossey Mine plan has been updated to incorporate modified resource model and additional mine dewatering capacity.

• Concentrate production significantly improved on March quarter despite a reduction in head grade, and comprised:

• 7,656t of zinc concentrate grading 48% zinc;

• 3,597t of lead concentrate grading 51% lead; and

• 451t of copper-precious metals concentrate grading 18% copper, 6,352 g/t silver and 12.8 g/t gold.

• Infill drilling at Fossey East confirms high grade potential; 5.6 metres at 14.7% zinc, 5.4% lead, 0.7% copper, 109 g/t silver and 2.1 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.

• A $25 million financing process is underway to support the revised Fossey Mine plan, increase exploration and provide an adequate working capital buffer. Trading in the Company’s shares has been voluntarily suspended pending finalisation of the financing process.

• Mining operations continue normally, with the next milling campaign planned to commence as scheduled, on 1st August.

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

This quarterly report provides a detailed review of the Company’s activities during the June quarter including a summary of the technical and financial issues that impacted the Company’s operations and an outline of the measures being implemented by management to underpin the future of the business. It concludes with some exciting exploration results including the recent McKay discovery made in July.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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A significant highlight achieved on the 8[th] June 2011 was attaining the milestone of 500 days Lost Time Injury (LTI) free at the Company’s Fossey Underground mine managed by Mancala, Bass’ mining alliance partner.

Production from the Fossey underground mine progressed well with 109,000 tonnes of ore produced during the quarter, more than double the previous quarter’s production and slightly below the target of 115,000 tonnes. The fourth milling campaign achieved excellent results in terms of throughput and recovery for all metals and concentrate products. These outcomes were achieved despite two unforseen technical issues concerning water inflow into the mine and grade underperformance. Management and the operations team have responded promptly to remedy these issues resulting in a revised mine plan. Details on these updates were reported to ASX on 20th July and comment is provided in the following technical section.

Clearly the recent technical issues affecting the Hellyer Mine Project (HMP) impacted negatively on the Company’s growth and development strategy, and the Company is currently seeking additional funding to realign HMP cash inflows and outflows caused by production shortfalls and delays, and to provide for an adequate working capital buffer.

The overall corporate strategy of the Company is to:

1. Deliver the revised forecast cash flows from the Fossey mine and bring the adjacent Fossey East deposit into the mining schedule as quickly as possible.

2. Increase exploration activities to increase mine life and underpin long-term cash flow.

3. Initial focus on the new McKay discovery and Fossey East Extensions.

4. Conversion of the existing Que River and Hellyer resources into reserves.

5. Systematic testing of new targets in wake of new discoveries in unexpected geological positions.

6. Complete detailed study of the Tailings Gold Recovery Project to a bankable standard as quickly as possible.

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

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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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 .

JUNE 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. On the 8th of June 2011 the Fossey Project recorded 500 days LTI free. This is a reflection of the commitment from crews and staff towards maintaining a safe working environment and is a tremendous outcome given the adverse water and ground conditions, along with extreme weather events, that the operation has faced recently. As at the end of June the LTI free record since commencement stands at 523 days. For the overall Hellyer operations, it is 318 days since the last LTI to the end of June.

1.2 ENVIRONMENT

There were no material environmental incidents during the quarter on any Bass Metals’ managed tenements. At Que River, rehabilitating the site for care and maintenance following the cessation of open pit mining activities is largely complete.

1.3 HUMAN RESOURCES

The Company currently has approximately 145 employees and contractors on site, with 8 employees in the Perth office. Mr. Tony Brazier was recruited as the new Chief Financial Officer commencing in June 2011. Permanent vacancies remain for experienced mining and exploration geologists, with the gaps temporarily filled with consultants.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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2. OPERATIONS

2.1 HELLYER MINE PROJECT (HMP)

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

Table 1: HMP Production Summary

Description	Units	March Qtr 2011	June Qtr 2011	Variance to previous QTR	FY2011 YTD
MINE PRODUCTION Underground Development Mine Ore Production zinc lead silver gold copper	m t % % g/t g/t %	646 47,502 7.7% 4.7% 113 1.9 0.23%	586 109,127 7.6% 3.9% 113 2.0 0.25%	-9% 130% -1% -18% 0% 5% 11%	2,235 156,629 7.6% 4.1% 113 1.9 0.25%
PROCESSING Ore Treated Concentrator Feed Grades zinc lead silver gold copper	t % % g/t g/t %	40,917 6.1% 3.7% 94 0.70 0.22%	89,213 5.7% 3.3% 102 2.05 0.20%	118% -8% -9% 8% 191% -13%	130,130 5.8% 3.4% 99 1.62 0.20%
CONCENTRATE PRODUCED 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 %	2,501 48% 151 1.2 761 52% 924 1.6 148 16% 5,755 9.0 11%	7,656 48% 153 1.1 3,597 51% 702 2.9 451 18% 6,352 12.8 11%	206% 1% 2% -10% 373% -3% -24% 79% 205% 16% 10% 41% 2%	10,157 48% 153 1.1 4,358 51% 740 2.6 599 17% 6,205 11.8 11%

During this period mine development was extended to three ore production stopes and ore was consistently produced from 3 stopes in the 465 level. However mine development was adversely affected in early June when the decline development intersected a water structure in the 445 level (some 20 metres below the current ore production level), and this structure continues to produce water at a rate of 100 l/sec. To address the ingress of this excess water the pumping system was upgraded on a temporary basis, with plans in place to construct a permanent pumping station capable of handling 300 l/sec. Total mine water

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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being pumped out of the mine has reduced to 150 l/sec as at 30 July from 200 l/sec. at the end of June,2011.

Two mill campaigns were completed during the June quarter with the April/May campaign processing 33,000 tonnes and the May/June campaign processing 57,000 tonnes of ore. Following the April/May campaign the lead circuit was further optimised resulting in an increase in lead recovery during the May/June campaign.

The planned mill grades were not evident during the 1st half of the May/June campaign, which saw overall recovery suffering during the start of the campaign with a positive trend emerging as the campaign continued.

During the September quarter mine ore production is expected to stabilise at 100,000t with only one milling campaign planned in August to treat 52,000 tonnes. The September forecast is based on the revised mine plan and the new Ore Reserve. The new mine plan is based on producing approximately 30,000 tonnes per month of ore with a milling campaign planned every second month to process approximately 60,000 tonnes per campaign.

To date (29 July 2011) there is estimated to be 47,000 tonnes of ore on the Mill stockpile grading 9.5% zinc, 5.4% lead, 0.37% copper, 98 g/t silver and 1.9 g/t gold and the Mill is ready to commence the next processing campaign on the 1st August.

2.1.1 Mine Plan

An updated mine plan is currently being finalised which generates a strong cash return at good margins focussing only on the high-grade massive base metal sulphide portions of a revised geological model. It has additional expenditure allocated to ground support and dewatering services and assumes a less aggressive ore production rate.

Resource Model

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

In late May early June several adverse and unforseen events occurred concurrently. The infill drilling program was completed and systematic interpretation of the data commenced. However, as reported previously, results from the first milling campaign to continuously process a large proportion of stoping ore were indicating that the planned head grade from blending several stopes was persistently underperforming. Over the ensuing weeks some improvements in the head grade were achieved by changing the ore production focus away from one “suspect” stope.

Since that time, the majority of the infill-drilling data has been interpreted and all assays received, resulting in a modified interpretation of the outline of the high-grade massive base metal sulphide portion of the Fossey Resource. This is illustrated in Figure 1 which depicts the new modified (red) resource shape at a (Pb+Zn)>5% compared to the original (orange outline). The original drilling density did not identify continuous internal zones of low grade baritic alteration through the resource; the hand specimen scale textures and drill data indicated irregular zones of barite overprinting the massive sulphide and these zones formed part of a larger tonnage and lower grade resource on which the Fossey ore reserve was based.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Therefore as stoping progressed from west to east without recognising this continuous barren to low grade interval, high-grade ore was blasted with the low-grade material resulting in mixing and the unexpectedly low head grade performance.

Figure 1: Fossey Resource Model – Cross section with old and new resource outlines.

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The new Mineral Resource estimate is presented in Table 2 and is reported in accordance with the JORC Code, together with a Competent Persons Statement above with details of the estimation technique provided in Attachment 1. The estimate includes virgin unmined resource, mined resource and remaining resource as at 30th June 2011.

Table 2: Fossey Mineral Resource Estimate as at 30[th] June 2011 (at a 5% Pb+ Zn cut-off)

(at a 5% Pb+ Zncut-off)
CATEGORY	'000 TONNES	Cu%	Pb%	Zn%	Ag g/t	Au g/t
Measured Resource	48	0.5	7.6	14.0	140	2.7
Indicated Resource	41	0.4	9.0	14.8	209	2.9
Inferred Resource	1	0.1	1.7	4.3	93	2.1
MINED Measured, Indicated and Inferred Resource	90	0.5	8.2	14.3	171	2.8
Total Measured Resource	286	0.6	7.4	14.2	137	2.9
Total Indicated Resource	108	0.4	6.8	11.0	120	1.8
Total Inferred Resource	66	0.3	4.7	8.4	94	2.1
REMAINING Measured, Indicated and Inferred Resource	460	0.5	6.9	12.6	127	2.5

www.bassmetals.com.au

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846

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Measured Resource	335	0.6	7.5	14.2	137	2.9
Indicated Resource	150	0.4	7.4	12.0	145	2.1
Inferred Resource	65	0.3	4.7	8.4	94	2.1
VIRGIN Measured, Indicated and Inferred Resource	550	0.5	7.1	12.9	134	2.6
Original Fossey Resource estimate ASX release 18th Sept **2009 ***	790	0.4	5.8	9.9	137	2.5
Change in Resource(%)	-30	24	23	30	-2	3
Change in contained Metal (%)		-14	-15	-9	-32	-29

Note: Small rounding errors may occur

*- 10kt of minor lenses not included in the new estimation have been removed to allow a direct comparison between the two estimates.

There are several fundamental changes that impact on the overall mine plan. The tonnage is down by 30% but the lead and zinc grades are up by 25% on a combined basis. The overall result is that the contained lead and zinc is reduced by 12% and precious metals are reduced by 30%, the latter reflecting relatively higher precious metal grades (and lower base metal grades) in the baritic material.

Reconciliation work based on the current mine voids to late June 2011 and ore processed to date indicates tonnages and grades of all metals to be within a range of 10%, which is considered to be a very close reconciliation supporting the updated resource model.

This creates a strong mine plan with higher grades based on more detailed data, albeit with some loss of contained metal. There is some upside with higher head grades having a positive impact on mill performance and the potential to extract lower grade baritic mineralisation on an incremental ore basis, however the latter will be undertaken opportunistically and is not included in the ore reserve.

Revised Ore Reserve

A revised Ore Reserve has been estimated and is summarised in Table 3 below. The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources used to produce the Ore Reserves. The Ore Reserve is reported in accordance with the JORC code. A Competent Persons Statement is provided above, and details of the estimation technique are provided in Attachment 1.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Table 3: Revised Fossey Ore Reserve estimate as at 30 June 2011 (at a 5% Pb+ Zn cut-off)

(at a 5% Pb+ Zncut-off)
CATEGORY	'000 TONNES	Cu%	Pb%	Zn%	Ag g/t	Au g/t
Proven	269	0.5	6.7	12.9	2.6	123
Probable	170	0.2	3.4	5.6	1.5	71
Total	439	0.4	5.4	10.1	2.2	103
Underground Stock(Proven)	37	0.3	3.3	5.7	1.9	83
Surface Stockpiles(Proven)	8	0.3	5.1	9.1	2.3	137
Total Reserve	495	0.4	5.3	9.7	2.2	103

The updated mine plan takes into account that mine productivity to date has been adversely impacted by technical issues associated mainly with water inflow and hence all technical parameters assume that the water situation is not going to improve, will remain high and potentially inflow rates could increase further. On this basis the resultant mine budget that inputs to the corporate cash flow includes:

• An extra $2 million of capital to further upgrade the mine dewatering system and ancillary services with sufficient capacity and flexibility to also handle possible Fossey East dewatering requirements.

• Lower the ore production rate to a monthly average of approximately 30,000 tonnes (compared to the previous rate of 40,000 tonnes per month).

• Higher operating costs now assessed at $84/tonne of ore compared to $42/tonne previously. Approximately 60% of this increase is from additional costs, whilst the balance is a result of less tonnes over which to allocate the mine fixed costs, which comprise 60 to 70% of the total mine cost.

There is scope within this operating plan to improve on these assumptions, but management regards these as appropriately conservative and achievable.

2.1.2 Hellyer Concentrator Operations

The performance of the 1.5mtpa capacity Hellyer Mill has continued to improve with each campaign in terms of both availability and concentrate production. This performance is reflected in Figures 2 – 5 which are summaries of zinc, lead and copper concentrate production. These figures (for the June campaign) are now fully reconciled metallurgically, following the depletion of all stock tanks and concentrate filtering. Previous figures reported as part of operational updates were estimates subject to this final reconciliation.

Operational assumptions in the production plan are based on actual performance to date in terms of throughput, costs and recoveries. As an example refer to Table 4 below, which summarises actual recoveries achieved progressively to date. These are final figures based on the final metallurgical reconciliations. The “Recovery-Budget” column illustrates the assumed recoveries in the mine budget.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Figures 2 to 5: Graphical Summaries of Mill Performance per Campaign

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16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Table 4: Metallurgical Recoveries

Metal	Target Concentrate	Recovery-Actual	Recovery-Actual	Recovery-Actual	Recovery-Budget	Recovery-Budget
		June %	June Qtr %	PTD %	Jul- Dec2011 %	2012 %
Zn	Zn	76	73	65	70	75
Pb	Pb	74	61	50	65	75
Cu	Cu-Ag	44	47	39	43	56
Ag	all3	69	72	66	70	70

Metallurgical performance is impacted by head grade, with lower recoveries generally associated with lower head grades. Therefore given the lower head grades in the 4th campaign the Hellyer Mill performed exceptionally well to achieve the resultant high recoveries. With this performance and grades expected to improve through successive campaigns, there is clearly potential for further improvement above budgeted levels and previously achieved levels.

Milling costs have been factored up by 25% in the production budget, which reflects two issues; the campaign milling with fixed costs being allocated over lower tonnes but also some increased input costs such as labour, power and grinding media.

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.

A large portion of the lead and zinc concentrates produced as tabulated in Table 1 were sold during the quarter, with the balance being sold and invoiced in July.

Shipment and sales of the copper-precious metals concentrates occurs in 500 tonne containerised lots and is now planned to commence in the September quarter. The Company has received prepayments for approximately 75% of the material produced to date.

2.1.4 HMP Summary

Bass Metals has responded rapidly to a series of significant and unexpected technical events with a strong and conservative production plan for the Fossey Mine going forward. The key production statistics are summarised in Table 5 below. While it is a reduction in scale from the original Fossey component of the HMP, it generates a significant cash surplus and when cash surplus forecasts from Fossey East (currently only at a Concept Study Stage) are included, puts the Company squarely back on track with a higher margin-lower risk project with the same excellent potential to grow further.

Table 5: HMP – Revised production estimates (Fossey Ore Reserve only)

	Units	Revised	Actual to date	Original
Concentrateproduction
Zinc	Kt	72	10.2	106
Lead	Kt	34	4.4	54
Copper/silver	Kt	6	0.6	9
Mine Gate value*	$/t ore	$249		$194
Cash Surplus	A$M	45		75

*Based on current offtake terms and the following metal prices and exchange rates :Zn – US$2,293/t, Pb – US$2,577/t, Cu – US$9,031/t, Au US$1,538/oz & Ag US$37/oz AUD:USD 1.06.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846

www.bassmetals.com.au

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2.1. 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.

3. SPECIAL PROJECTS

Two Feasibility studies are in progress focussed on the significant Hellyer Tailings Mineral Resource, which contains over 500,000t of combined lead and zinc, 800,000oz of gold and 32 million ounces of silver, as presented below in Table 6.

Table 6: Hellyer Tails Combined Mineral Resource Estimate

JORC classification	Tonnes (Mt)	lead %	lead %	zinc %	zinc %	copper %	copper %	silver g/t	gold g/t
Measured	4.9	3.1			2.8	0.2		105	2.7
Indicated	2.5	3.0			2.6	0.2		104	2.6
Inferred	2.1	2.9			1.7	0.2		103	2.4
Total	9.5	2.8			2.5	0.2		104	2.6
Note rounding errors will occur. Table 6a: Containedmetalcomprises:
Lead (t)	Zinc (t)		Copper (t)		Silver (Moz)			Gold (Moz)
290,000	240,000		20,000		32			0.8

Note rounding errors will occur.

The Hellyer Tails Mineral Resource presented in Table 3 above is reported in accordance with the JORC Code; refer Competent Persons Statement. Further details are available in Attachment 2).

3.1. BASE-METALS RECOVERY STUDY

This study is focussed on fully utilising the 1.5mtpa capacity Hellyer Mill by reprocessing the Hellyer Tailings to recover lead and zinc into separate concentrates. This requires detailed and lengthy testwork, examining lead and zinc recoveries and the resultant concentrate grades at a range of grind sizes. Preliminary results are not encouraging on the technical capacity to produce two distinct concentrate streams, but any conclusive results are subject to completion of the testwork which is taking significantly longer than originally estimated by the testwork laboratory. The opportunity to produce a bulk lead-zinc concentrate remains and the Company does intend to complete a full detailed technical review of this as quickly as practical as a possible means of fully utilising the large Hellyer Mill.

3.2. GOLD RECOVERY STUDY

As highlighted above the Hellyer Tailings also contain significant gold and silver. The gold is refractory but several conventional process flow sheets were tested in detail in the 1990s confirming the technical capacity to recover varying levels of gold and silver. However given the prevailing low precious metals prices at the time the project was regarded as uneconomic. Bass acquired the Hellyer Tailings Mineral Resource in March 2009 and since then has completed a Scoping Study confirming the potential viability of several conventional processes, as well as the new Albion process for silver and gold recovery. Indeed, Bass is the first Company since the 1990s to examine the application of largely conventional refractory gold processing systems on this resource.

A Feasibility Study is underway, with the first stage being a major testwork program to validate and update some of the previous test work done. This work is being done on behalf of Bass by

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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metallurgical consulting group BatteryLimits. To date, only preliminary results for the testwork program are available, as this testwork is also being delayed by high demand in the testwork laboratories. The results available are presented in Table 7 below.

Table 7: Preliminary Gold and Silver Recovery Testwork Results.

		Direct Cyanidation (after UFG)	Direct Cyanidation (after UFG)	Albion	Process	Partial Pressure Oxidation	Partial Pressure Oxidation
	Units	Au	Ag	Au	Ag	Au	Ag
Average Resource Grade	g/t	2.6	104	2.6	104	2.6	104
2010 Scoping Study Results
Total Recovery	%	25	40	86	82	37	65
Est. Metal Recovery*	koz/pa	21	1338	72	2742	31	2174
Current Preliminary results (work-in-progress)
Total Recovery	%	32	49	89	87	84	na
Est. Metal Recovery	koz/pa	27	1639	74	2909	70	na

• Estimates of metal recovery assume processing of 1 million tonnes of tails at the average resource grades, which is considered to be a realistic annual tailings recovery and processing rate.

These results are regarded as highly encouraging for the potential to establish a large scale gold production facility at Hellyer based initially on the 9.5 million tonnes Hellyer tails resource. Testwork results for silver recovery utilising a Lime Boil technique are still pending. The next phase of work will involve an assessment of likely operating and capital costs for each method based on the updated results to enable selection of a single process route for further testwork and engineering studies.

4. EXPLORATION

During the quarter surface exploration activities focused on targets in the Fossey-Hellyer area (Fossey Trend, Switchback) and regionally at Lake Margaret. Late in the period underground drilling recommenced on the Fossey East deposit. Sixteen drill holes for a total of 3,057 metres were completed for the period (Table 8).

Subsequent to quarter’s end the Company reported a potentially significant new discovery, named the McKay prospect, following a high grade intercept in a diamond hole located approximately 200 metres north-east of Fossey East.

Bass’ current tenements are shown in Figure 6 and the locations of the major prospects on the Mine Leases are shown in Figure 7.

4.1 HELLYER – QUE RIVER AREA EXPLORATION

4.1.1. Fossey - Fossey East Target Area

Five holes (HLD1025-1029) tested the Fossey-Hellyer alteration zone towards D-Zone for a total of 1,216 metres. These holes have delineated the alteration zone in this area and also clarified the relationship between this zone and the D-zone alteration (Figure 8).

Underground diamond drilling of Fossey East recommenced on the 1st June 2011. By the end of the quarter a total of 7 drill holes (FUD66-FUD72) had been completed out of a planned 12 hole 2,000 metre program. Assay results are available for the first hole only; FUD0066 intersected a 5.6 metre wide zone of high grade mineralisation downhole assaying 14.7% zinc, 5.4% lead, 2.1 g/t gold, 109 g/t silver and 0.7% copper at the top of a barite and base metal

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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zone. (Figures 9 and 10, Tables 8 and 9). The entire combined barite and base metal zone assayed 4.7% zinc, 1.8% lead, 1.0 g/t gold, 45 g/t silver and 0.2% copper over 22.15 metres downhole. Drill holes FUD0067 – FUD0072 have been completed but assays remain pending. FUD0072 intersected a 3.4 metre wide chalcopyrite rich (visually estimated +2% Cu) base metal zone.

Underground mapping and 3D modeling of the Fossey and Fossey East ore body clearly demonstrates that the ESF has had significant movement post mineralisation. Drilling is planned to test for mineralised extensions across the ESF, Jack Fault and also down dip and along strike from the Fossey-Fossey East mineralisation.

The Fossey East mineralisation is sub-vertical (Figure 10) and is at a high angle to the regional stratigraphy. This relationship, and the existence of an alteration envelope surrounding the mineralisation, highlights its occurrence deeper in the stratigraphy and within an alteration zone, which opens up significant areas previously interpreted as non-prospective.

4.1.2. Switchback Target.

Drilling at the Switchback target was completed with HED24 (244 metres). The drill hole was successful in delineating and demonstrating the continuity of the prospective horizon both updip and to the west of earlier drill holes; although no base metal sulphide clasts were intersected.

Table 8: Drill hole collar details:

Hole ID	Grid* North	Grid East	Azimuth	Dip	Final Depth
HLD1025	9899.31	5399.69	270	-49	140.1
HLD1026	10050	5570	220	-73	152.3
HLD1027	9700	5419	270	-45	327.9
HLD1028	9852	5195	90	-45	344.4
HLD1029	9852	5195	135	-45	251.5
FUD0066	10095.559	5693.271	307	-36	180.2
FUD0067	10095.47	5693.13	295	-30	172
FUD0068	10095.253	5693.228	287	-44	162.1
FUD0069	10094.405	5693.154	273	-43	160
FUD0070	10094.409	5692.922	273	-34	165
FUD0071	10095.718	5693.502	313	-45	181.3
FUD0072	10095.456	5693.528	307	-55	190.9
HED24	9030.25	5742.61	181	-60	263.8
LM2	34328.14	10998.98	83	-55	351
LM3	34544.93	10388.69	360	-90	32.5
LM4	34575.82	10509.20	360	-90	65.1

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

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Table 9: Drill hole intersections- Fossey East, June-July 2011.

From (m)	From (m)	To (m)	Drilled Interval (m)	Est. True thickness (m)	Zn (%)	Pb (%)	Cu (%)	Ag (g/t)	Au (g/t)
FUD0066(at > 5 %(Pb+Zn) cut-off)
113.4	119.0		5.6	4.9	14.8	5.5	0.7	109	2.1
Within a zone(defined by barite alteration)
113.4	135.55		22.15	19.5	4.7	1.8	0.2	45	1.0

Figure 6: Current tenement holdings:

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16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Figure 7: Hellyer-Que River mining licences, locality map and major prospects.

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Figure 8: Location plan of Fossey - D Zone target area, completed holes HLD1025-1029.

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16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Figure 9: Schematic Long Projection showing all of the Fossey East drill intercepts

.

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Figure 10: Section 10162.5mN showing new intersection FUD0066.

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4.1.3 D-ZONE – Que South

The D-Zone and Que South alteration zones (Figure 7) have long been recognised as significant alteration zones. In Bass’ recent geochemical and SWIR surveys both prospects were highly anomalous in all criteria, including pathfinder elements such as arsenic (Figure 11). 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 occurs deep within the footwall alteration zone opens up large tracts, previously considered non-prospective, for additional exploration (see also section 4.4 below). Drilling programs to systematically test these zones, now regarded as high-priority targets, are currently being designed.

Figure 11: Arsenic anomalism in drill holes with significant anomalism around known ore bodies and the D-Zone and Que South targets.

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4.1.4 McKay Prospect

Diamond drill hole HLD1030 intersected 7.0 metres of high grade massive base metal sulphide mineralisation assaying 22.3% zinc, 9.9% lead, 3.4 g/t gold, 181 g/t silver and 0.7% copper and an additional 4.1 metres of combined barite and base metal mineralisation (Table 10 and 11). The entire 11.1 metre zone assayed 14.9% zinc, 6.5% lead, 2.6 g/t gold, 130 g/t silver and 0.7% copper.

This intersection is similar to Fossey East both mineralogically and in its geological setting. The mineralisation appears from orientated core to be steep and striking grid north-south.

This drill hole targeted potential offsets of the Fossey deposit along the Jack Fault. The McKay prospect is a new discovery with potential for extensions both to the south and down dip (Figures 12 and 13). Previous drilling in the area intersected narrow high grade base metal intersections to the north (for example, 1.9 metres 0.6% copper, 8.4% lead, 16.9% zinc, 141 g/t silver and 3.0 g/t gold), and these intersections may be related to the same mineralised structure.

Table 10: Drill hole intersections- Fossey East (June-July 2011).

From (m)	From (m)	To (m)	Drilled Interval (m)	Est. True thickness (m)	Zinc (%)	Lead (%)**	Copper (%)	Silver (g/t)	Gold (g/t)
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

Table 11: Drill hole details:-

Hole ID	Grid* North	Grid East	Azimuth	Dip	Depth
HLD1030	10280.3	5861	264	-69	On going

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

**- Standards submitted with these samples returned low lead values, these are being investigated by the laboratory and may result in an increased lead grade.

Bass’ exploration geologists have observed that the mineralisation occurs much deeper in the geological sequence than previously thought prospective, which highlights new untested opportunities for the discovery of additional Fossey or Fossey East scale zones of mineralisation along the Hellyer-Fossey trend.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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Figure 12: McKay Prospect, location of HLD1030 intercept and target potential.

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Figure 13: Section 10270mN showing new intersection HLD1030 and relationship to Fossey and Hellyer Deposits.

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www.bassmetals.com.au

Telephone (08) 6315 1300 Facsimile (08) 9481 2846

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4.2 REGIONAL EXPLORATION

Bass’ current tenement position is shown in Figure 6.

4.2.1 Heazlewood (EL 31/2003) and Whyte River (EL36/2003)

EL31/2003 Heazlewood

Two skarn tin-tungsten targets have been generated by Venture Minerals on this tenement. Drilling is planned for the summer.

EL36/2003 Whyte River

Venture Minerals have assessed the iron ore potential within the Bowry Formation on this tenement and have not recommended further work. Plans are underway to test for tin-tungsten skarn mineralisation in the eastern part of the tenement.

During the quarter Bass Metals entered a joint venture with Stellar Resources on EL36/2003 Whyte River. Under the terms of the joint venture, Stellar can earn a 75% interest in all commodities apart from tin, tungsten and iron by sole funding the first $500,000 of exploration over the next three years.

Initial reconnaissance sampling and a review of the historical data was completed during the quarter.

4.2.2 Lake Margaret (EL 28/2009), BMS 75% CLY 25%

Three diamond drill holes (LMD2 – LMD4) testing for high-grade, North Lyell style copper mineralisation were completed at Lake Margaret for a total of 449 metres (Table 8). Diamond drill hole LMD2 was designed to test the locality upslope from the mineralised glacial erratic in a North Lyell-style geological position. The hole intersected the alteration zone but away from the targeted Great Lyell Fault structure that is typically associated with North Lyell mineralisation. Drill holes LMD3 and LMD4 were vertical holes near the high grade glacial erratic to test whether the erratic was in situ or close to source. The two holes indicated relatively shallow glacial cover and that the target position likely occurs further upslope. Further geophysical surveying, mapping and drilling is planned for this prospect.

5. CORPORATE ACTIVITIES

5.1 FINANCIAL POSITION

The Company’s closing cash position at the end of the June 2011 quarter was $6.4 million.

During the quarter the Company received a total of $12.7 million in provisional and prepayments for its zinc, lead and copper-silver concentrates.

On the 14th April 2011 the Company announced a capital raising of $10 million through the placement of 27,027,027 shares at $0.37 each through a placement to largely SE Asian and Australian institutional investors.

On the 11th July the Company went into a trading halt and subsequently voluntary suspension whilst it completes a financing transaction.

5.2 HEDGING

No new hedging contracts were entered into during the quarter.

Bass has settled on 1,060 tonnes of zinc, 437 tonnes of lead and 107,000 ounces of silver forward sales contracts and realised an overall hedging loss of $912,000.

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The remaining hedge position comprises 10,439 tonnes of zinc at a forward price of A$2,459/tonne, 6,438 tonnes of lead at A$2,410/tonne and 451,000 ounces of silver at a forward price $15/ounce (after accounting for the $11/ounce prepayment). As at the 30th June, 2011 the overall hedge position was A$7.31 million out of the money because the spot metal prices are higher than the hedged metal prices. Approximately 32% of payable zinc, 33% of payable lead and 36% of payable silver production from the Fossey Ore Reserve is hedged. The Company is also undertaking Quotational Period (“QP”) hedging to ensure that it locks in sales revenue from the time of production (and provisional payments) to the period when the final invoices and metal prices are fixed, the QP.

5.3 FINANCING

At the time of writing this report, the Company is in advanced discussions with several parties seeking to raise $25 million (before costs) of new capital potentially through two tranches of Convertible Notes with the funds to be used to:

• Manage a short-term working capital deficit largely associated with the HMP ($8 million).

• • Maintain a minimum working capital position of $9 million.

• Provide adequate funding of approximately $6.5 million over the next 12 months to sustain a large scale exploration and feasibility study program.

The secured lender to the project, RMB Australian Holdings Ltd is supportive of the measures being undertaken by the Company and subject to the completion of the above financing has not requested advancing the scheduled repayments of the outstanding $13.6 million debt which is due to be repaid by 31st December 2012. The Company has maintained its repayment obligations under the facility.

It is important to reconcile the rapid change in the Company’s financial position with the underlying technical events. Until late May, the HMP was forecast to become cash flow positive in the June quarter 2011, and this forecast appeared reasonable until late May-early June when two adverse and unforseen technical issues arose; a persistent grade short fall from the mine and an extraordinarily high water inflow into the mine on intersecting a local fault structure. Since that time infill grade control drilling has been completed, the ore body model has been revised and the pumping capacity of the operation has been significantly upgraded. The impact of these events on the short term cash flow position has been to:

• Put mine development, which accesses the ore, further in arrears by 1 month.

• Delay the milling campaign schedule, which defers receipt of $8 to $10 million by 1 month.

• Lower revenue by $2 to $4 million due to the reduced grades causing lower than anticipated concentrate production.

• Increase costs, principally for dewatering and ground support by $2 to $3 million.

This resulted in a mismatch between timing of revenue and costs that rapidly led to an overall cash shortfall of $12 to $17 million in July as compared to the forecasts prepared in mid May.

On the 14th of April the Company announced an institutional equity Placement to raise approximately $10 million through the placement of 27,027,027 shares at $0.37 each. The Placement was made predominantly to new Asian based institutional investors. The Placement was structured in two tranches as follows:

• Tranche 1 – 10 million shares being placed under the Company’s existing 15% limit; and,

• Tranche 2 – for the issue of a further 17 million shares which was subject to shareholder approval received on 23rd May 2011.

Both tranches of the placement were settled during the quarter.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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5.4 CAPITAL STRUCTURE

During the quarter the Company issued:

• 50,000 fully paid ordinary shares on exercise of unlisted employee options

• 27,027,027 fully paid ordinary shares in relation to placement

• 5,900,000 options to RMB Australian Holdings Limited with a 31.8 cent exercise price and expiring 27 May 2014.

As at 30th June 2011, the Company has 213,430,823 fully paid ordinary shares and 18,050,000 unlisted options on issue.

------ENDS------

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872

Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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ATTACHMENT 1

Checklist of Assessment and Reporting Criteria- Fossey Resource and Reserve Estimate.

Checklist of Estimate.	Assessment and Reporting Criteria- Fossey Resource and Reserv
Criteria	Comments
Geological Setting	Fossey is a Volcanic Hosted Massive Sulphide deposit comprising a stratiform zone of dominantly baritic mineralisation, associated with areas of high-grade Base Metal Sulphide (BMS) and underlainbyminorstringerand disseminatedmineralisation.
Tenement and land status	Fossey occurs within Hellyer Mining Lease CML103M/87 and is wholly owned by Bass Metals Ltd.
Drilling	The 2009 resource estimate was based on 25m spaced drilling from surface (27 Bass and 14 historic holes in mineralisation). The current resource estimate includes an additional 42 intersections from infill underground drilling and 16 sets of continuous chip samples from underground cross-cuts through mineralisation. All Bass Metals Ltd holes were diamond- drilled and NTW, NQ or LTK60-sized core recovered (diameters of 56mm, 47.6mm or 45.2mm respectively). Historic holes were also diamond-drilled and are of NQ or BQ core size (47.6mm or 36.4mm diameter respectively). >90% core recovery, averaged over the entire hole, was achieved during Bass Metals drilling with close to 100% recovery in the ore zones. Similar high recoveries were achieved by historic drilling. The bulk of the Fossey resource is now drilled out on nominal 12.5m spacing – north of 10225N remains to be completed. Surface drilling is on E-W sections and underground holes are drilled as skewed fans from three underground sites.
Logging	All drill holes have been geologically logged using standard Que-Hellyer logging codes. Wet and dry digital photographs of all Bass Metals core were taken and RQD measurements were recorded at per drill-run intervals (average of 3.0m). For historic holes RQD was also measured and core photographs onslidefilm were taken.
Sampling	For both Bass and historic drilling half-core samples were collected at nominal 1.0m intervals or at lithological boundaries. Sampling extended into barren host rocks or sub-grade mineralisation inboththehangingwallandfootwall.
Assaying	Half core samples were submitted for assay, with SG determination conducted by the laboratory on each assay sample. For the current infill drilling program, samples were submitted to ALS Laboratories in Burnie, Tasmania. Samples were analysed for Cu, Pb, Zn, As, Fe, Ba, S and Si (glass fusion XRF), Ag (AAS), Au (fire assay). For the 2007-2009 surface drilling programs samples were assayed for Cu, Pb, Zn, Ag, As and Fe, using a modified aqua regia digest followed by ICP, at Amdel laboratories in Adelaide, South Australia. Au and Ba were assayed at Ammtec (now ALS) laboratories in Burnie, using fire assay and pressed powder XRF respectively. QA-QC involved standards, blanks and duplicates (one of each every 25 samples). Historic assays were carried out on half core at Aberfoyle’s company laboratory (now the ALS Burnie lab) using pressed powder XRF for Cu, Pb, Zn; AAS for Ag and As and Au by fire assay. Internal laboratory blanks and standards were the only QA-QC for historic holes.
Surveying	Historic drill-hole collar locations were measured by the Hellyer Mine surveyor, Bass surface drill-holes by a contract surveyor and Fossey underground holes by the Fossey Mine surveyor.
Database integrity	The drill-hole database used comprises Bass Metals drilling data recorded on Excel spreadsheet and historical data in ASCII format, both imported into Datamine software. New assay results together with standard and blank results were checked to ensure these were withinacceptablelimits.
Geological Interpretation	The Fossey deposit strikes grid NNW and has the broad cross sectional form of a folded downward tapering wedge. The deposit comprises three major zones: • _Massive Barite Zone -_The bulk of the deposit comprises massive barite, which is dominant in the stratigraphically upper areas. • _BMS Zone -_Underlying the massive barite zone is banded to massive BMS. The boundary of the footwall of the BMS is a sharp contact. The internal boundary between the BMS and Barite zones is usually a sharp mappable contact but occasionally is a gradational grade boundary. • _Footwall Zone -_Commonly underlying the BMS is low to moderate grade base metal mineralisation as disseminations to stringer veins up to several 10’s of centimeters thick.
Estimation and modelling techniques	Elements were estimated using ordinary kriging, restricted to mineralisation domain boundaries. Variography of all elements was studied and grade continuity modelled.
Cut-off	The outerboundary oftheFossey barite andBMSzonesis based onsharp geological

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parameters.	contacts. The internal boundary between the two zones can be gradational and a boundary of 5%(Pb+Zn) was chosen as the best grade which provided good continuity between holes and from section to section. Immediately underlying the BMS zone holes usually contain stringer vein and / or disseminated to semi-massive mineralisation. This domain was wireframed at a cutoff of 5% (Pb+Zn.
Previous Mining	Mining of the Fossey deposit began in December 2010 with development ore being sourced from the 465 level. Longhole open stoping production commenced in March 2011. To the 30thJune 2011 a total of 158KT of ore has been hauled to the Hellyer Mill ROM grading 0.2% Cu, 3.6% Pb, 6.6% Zn, 1.7g/t Au and 95g/t Ag.
Mining factors / assumptions.	Some dilution (<5.0% Pb+Zn) is internal to the ore body and falls within the coherent stope shapes; this is classified as planned dilution. This material is predominantly found between the two main zones of BMS lenses. A portion of planned dilution is also from outside of the Fossey BMS and Stringer Zones where in the lower levels of the mine, stope geometries require some dilution to commence stope blasting. Planned dilution amounts to some 40K tonnes, or some 8% of the total reserve tonnage. In general, the unplanned dilution has been included where pillar widths between the two high grade BMS lenses, between the 445 and 495 levels , are too narrow to retain or are required to be extracted to allow for upper level ore extraction. The average grade of this material has been calculated using the data from the geological block model. For the primary and secondary stopes, unplanned dilution is estimated to average 10%, where dilution is defined as: Dilution (%) = (volume of unplanned dilution) x 100/(volume of resource tonnage in stope envelope) Dilution grade has been assigned a zero grade across all stopes, both primary and secondary. Initial CMS surveys of the 465 level stopes indicate no dilution is occurring. Most dilution is anticipated form the eastern and western contacts in the primary stopes driven by orebody contact structures and rock type changes. Secondary stope dilution will be waste rock or CAF. The total unplanned waste rock dilution which is contained within the stope reserve amounts to approximately 40K tonnes at 0.04% Cu, 0.49% Pb, 0.99% Zn, 9.2g/t Ag and 0.41g/t Au at an average density of 3.0. In addition to dilution from stoping activities, development within the resource model has been estimated to attract 5% dilution and a recovery of 95% of the diluted resource volumes. Estimated dilution parameters at Fossey are consistent with the long term averages from Hellyer, where similar stope geometries were adopted and where similar CAF strength was used. Ore body recovery is estimated to be 90% of the diluted resource volumes as both the primary and secondary stopes are expected to be stable. The net result is an overall dilution (stope, pillars and development) of approximately 10% waste for an estimated recovery of 90%. The resource base underpinning the reserve estimate contains some 6.4% by mass (43k tonnes), material categorised as Inferred. This material is largely constrained to the periphery of the resource limits. This material has been included in the mine production schedule as a Mining Inventory, but is excluded from the Mineral Reserve Estimate (Table 1).
Metallurgical factors	No assumptions have been made about metallurgical treatment.
Bulk density	Where no bulk density measurement was available (414 of 3386 assay samples in the mineralised zones, mostly continuous chip samples) regression equations were developed to estimate bulkdensityfromassayvalues. Bulkdensitywasinterpolatedforeachblock.
Classification	Classification of resources and reserves was undertaken by taking into account data integrity, grade continuity, estimation variance, geological confidence and drill hole spacing.
Audits or reviews	Resource estimate was reviewed by resource consultant specialists, Snowden Group.

16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 Facsimile (08) 9481 2846 www.bassmetals.com.au

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ATTACHMENT 2

Checklist of Assessment and Reporting Criteria-Hellyer Tails Mineral Resource Estimate

Geological setting	Hellyer is a VMS style deposit occurring as polymetallic massive sulphide mineralisation within a mafic–felsic volcano-sedimentary sequence. The deposit was mined from 1985 to 2000 with production of 16.9 Mt @ 0.4% Cu, 7.2% Pb, 13.8 % Zn, 167 g/t Ag and 2.5 g/t Au. The Hellyer Tails Mineral Resource estimate relates to the tailings from thisproduction.
Previous calculations	AMC estimated the Mineral Resource of the Hellyer tailings in 2005. AMC was requested by Bass Metals Ltd to restate the Hellyer Tailings Mineral Resource estimate in 2009, allowing for depletion of tailing for reprocessing since 2005.
Tenement and land status	Hellyer occurs within CML 103M and is 100% owned by Hellyer Mill Operations a wholly owned subsidiary of BassMetalsLtd.
Drilling	Total hole drill samples were collected in June 1998 (61 holes) and July 2000 (53 holes) programmes. Vibracore drilling techniqueswere used.
Logging	No geological logging of the drill cuttings was undertaken. This is understandable given the type of material inthe deposit.
Sampling	Samples were collected at 2 metre intervals in the 1998 programme and 6.5 metre intervals in the 2000 programme. Drillholes were composited to one sample downhole for length weighting during grade estimation.
Assaying	Samples were analysed by AMMTEC Burnie Research Laboratory (BRL), Au was determined by fire assay and Cu, Pb, Zn and Ag were determined using XRD determination. Only minor QA-QCwas completed.
Database integrity	Routine validation was carried out by AMC.
Estimation and modelling techniques	A block model of the tailings was developed using predeposition (of tailings) topography and tailings surfaces determined in 1998, 2000 and 2009. Grades were estimated into the model using Ordinary Kriging. Grade in the Shale Pit and Western Arm areas (retreated tailings) were calculated bymetallurgicalbalance.
Cut-off parameters.	The Hellyer Tails Mineral Resource statement and classification refers to tonnes and grade above cut-offs of 1.65%Pb,2.04%Zn, 0.10% Cu,76.83 g/tAg and2.28 g/tAu.
Mining / metal assumptions.	No assumptions were made about mining or metallurgical factors
Bulk density	A bulk density of 1.93 tm~~-3~~was assigned to in situ tailings. Tailings that had been retreated were assigned a bulk densityof 1.64 tm-3.
Classification	A numeric code, RESCODE, was set in the model, with values of one, two or three, corresponding to Measured Resource, Indicated Resource and Inferred Resource respectively. The model has been classified in a global sense and the classification is only intended to be valid if the tailings are mined in their entirety. The model has been classified as Measured Resource in all areas where the drilling density was sufficient to allow an estimate of grade in the first pass. This equates to most of the tailings dam that was drilled in 2000. Kriging efficiency testing helped to confirm the classification in this area. The model has been classified as Indicated Resource at the peripheries of the drilling, as there was greater uncertainty in the continuity of grade. Four areas of the model have been classified as Inferred Resource, as there was uncertainty in grade continuity as well as uncertainty in the volume represented by the wireframes in these areas. The areas in question are the western edge of the model in the areas marked as 'shale borrow pits', the north eastern corner of the model where the tailings have inundated a shallow creek and tailings in the Western Arm dam and Shale Pit.

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16 Thelma Street WEST PERTH WA 6005 PO Box 1330 WEST PERTH WA 6872 Telephone (08) 6315 1300 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

	ABN 31 109 933 995 Consolidated statement of cash flows		Quarter ended (“current quarter”) 30 June 2011	Quarter ended (“current quarter”) 30 June 2011
			30 June 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 (12 months) $A’000
		12,700 (976) (9,298) (7,061) (1,538) 106 (654) 412		21,961 (3,596) (31,524) (11,705) (6,671) 418 (1,723) (930)
		(6,309)		(33,770)
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)		(102) (912)		(744) (780)
		(1,014)		(1,524)
		(7,323)		(35,294)

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(7,323)	(35,294)
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 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows	10,002 4,000 (2,400)	13,616 21,000 (2,400)
	11,602	32,216
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	4,279 2,113	(3,078) 9,470
	6,392	6,392

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
	90

• 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.

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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
		13,600	13,600
		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
			1,100,000
			2,519,143
			12,936,987
			6,787,686
Total			23,343,816

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)	6,313	2,001
	79	112
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	6,392	2,113

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.

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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 (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
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	213,430,823	213,430,823
	50,000 27,027,027	50,000 27,027,027	22 37	22 37
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

• See chapter 19 for defined terms.

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7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	1,375,000 225,000 425,000 250,000 1,145,000 600,000 600,000 400,000 300,000 300,000 300,000 950,000 3,000,000 1,230,000 200,000 200,000 200,000 150,000 150,000 150,000 5,900,000	- - - - - - - - - - - - - - - - - - - - -	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	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
	5,900,000	-	31.8 cents	27.5.14
	50,000	-	22.0 cents	5.7.13
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

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.

Sign here: Date: 29 July 2011 (Director/ ~~Company secretary)~~

Print name: Michael Rosenstreich

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

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.

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