GREENWING RESOURCES LTD — Interim / Quarterly Report 2011

Jan 19, 2011

==> picture [216 x 83] intentionally omitted <==

----- Start of picture text -----

ABN 31 109 933 995
----- End of picture text -----

20 January, 2011

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

Dear Sir

DECEMBER 2010 QUARTERLY REPORT OF ACTIVITIES

• Safety – excellent performance with no lost time injuries (LTI) on the Company’s leases and the Fossey Mine development, being executed by Mancala Mining, continuing an LTI free run of 343 days.

• Hellyer Mine Project now mining within the ore body and with the Mill refurbishment complete remains on track for first concentrate production in January 2011.

• Positive exploration results confirm Fossey East potential.

• New 3 to 5 million tonne exploration target identified beneath Hellyer workings.

• Gold Production feasibility study commences with collection of 2 tonnes of metallurgical samples.

• Closing quarterly cash position of $9.7 million.

I am pleased to attach the December 2010 Quarterly operating and cash flow report for Bass Metals Ltd (ASX:BSM).

The Company’s core focus in the December quarter continued to be the safe and on-time commencement of base and precious metal concentrates production from its 100% owned Hellyer Mine Project (HMP) in NW Tasmania. In full production the HMP is planned to produce 55,000 tonnes of zinc concentrate, 27,000 tonnes of lead concentrate and 5,000 tonnes of copper-silver-gold concentrate, per year. It is clearly a milestone project for the Company and its shareholders with the capacity to generate significant cash surplus to fund further growth through exploration, development and acquisitions.

There was good progress in the underground mine development, and the recently upgraded power and dewatering services contributed to the improved development rates. The first ore was intersected where predicted and ongoing ore development is delineating the ore body as planned at the expected high grades. The Fossey Mine area hosts localised highly pressured water bearing structures which continue to provide challenges to the mining team, as highlighted by a 12,000 tonne shortfall of ore hauled to the Mill experienced in late December. While these events reduce the Company’s working capital position in the commissioning phase the impact of any such future events on ore production will be lessened as more working areas are opened to produce ore. The Mill stockpile currently comprises approximately 18,000 tonnes of ore and is steadily increasing as more ores drives are developed in preparation for stoping.

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

==> picture [105 x 40] intentionally omitted <==

Refurbishment of the Mill was completed during the quarter and the commissioning process on water and waste rock commenced. The mill is ready to start the commissioning process on high grade Fossey ore which is due to commence in mid January. First concentrate sales are planned to occur in late January.

In late September the Company made a new discovery, Fossey East, within very close proximity to the existing Fossey mine infrastructure. The drilling program at Fossey East is ongoing and the results of several key completed drill holes remain pending. The drilling information available confirms the potential for a substantial mineralised zone in very close proximity to the existing Fossey mine development. Bass’ geologists have reported that the mineralisation is occurring much deeper in the sequence than previously thought prospective, and they consider that the Fossey zone has excellent potential to host additional FosseyFossey East scale zones of mineralisation in a pinch and swell pattern along the HellyerFossey trend. It is planned to report on the entire drilling program in late January, as all results become available and to quickly advance those results to enable completion of a preliminary Mineral Resource estimate.

Whilst the focus is on the HMP, important progress has also been achieved on several other fronts:

• Identification from historic drilling data of a large scale base and precious metal stock-work exploration target beneath the Hellyer workings;

• Continuing exploration target generation work, particularly at Lake Margaret where an exciting high-grade copper-gold drill target is being delineated for drill testing in early 2011;

• The start to the Gold Production feasibility study with a carefully monitored sampling program comprising 2 tonnes of samples being completed, ready for test work; and

• Ongoing test work to improve the quality of the bulk lead zinc concentrate the Company plans to produce from the Hellyer tailings.

These initiatives have the potential to see the Hellyer operational area develop into a long-term diverse base metal and gold production hub; a potential that will emerge over the coming year given positive exploration and testwork outcomes.

Bass Metals is clearly on the cusp of a new phase of production with an exciting pipeline of growth projects to apply that planned operating surplus to. However, until the commissioning process is complete and concentrate production has stabilised the company will prudently manage its tight working capital position before possibly adding more drill rigs and accelerating any study programs. It is a very exciting time for all Bass stakeholders with production from a high grade deposit into a positive metal price environment. On behalf of the Board and the 130 people working on our sites and in Perth, I look forward to providing further updates on production and exploration activities in the near future.

Yours sincerely

==> picture [136 x 74] intentionally omitted <==

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

==> picture [105 x 40] intentionally omitted <==

DECEMBER 2010 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. A further pleasing aspect is that the Fossey underground mine operation has an LTI free record since commencement which stands at 343 to the end of December. Bass congratulates Mancala and its mine crew for this excellent achievement. The overall Hellyer operations are 137 days since the last LTI to the end of December.

1.2 ENVIRONMENT

There were no material environmental incidents during the quarter on any Bass Metals managed tenements. At Que River significant progress has been made rehabilitating the site for care and maintenance following the completion of the ore sales open pit mining activities.

1.3 HUMAN RESOURCES

The Company currently has approximately 120 employees and contractors on site. It has recently recruited: a Production manager, Mr Don Crowe a senior Mining Engineer; Administration Manager, Ms. Olivia Davies and Senior Geologist Mr Keith Cameron-Smith. Recruitment for the mining and milling operations is largely complete, though openings remain for geologists.

2. OPERATIONS

2.0 HELLYER MINE PROJECT

Bass Metals has commenced a $20 million capital expenditure programme to develop the Fossey deposit and refurbish the Hellyer Mill to mine and process 400kt of ore to produce 55kt of zinc concentrate, 327kt of lead concentrate and 5kt of copper-silver-gold concentrate per year.

2.1.1 Ore Reserve

The Ore Reserve tonnage at Fossey has been increased by 34% to 1.1 million tonnes from 0.82 million tonnes as summarised in Table 1 below. The increased tonnage comprises lower grade disseminated mineralisation adjacent to the high-grade massive sulphide mineralisation that comprised the previous Fossey Ore Reserve.

Table 1: Fossey Ore Reserve Update*

Location	JORC Classification	Tonnes (kt)	Copper (%)	Lead (%)	Zinc (%)	Silver (g/t)	Gold (g/t)
Fossey Fossey	Total Probable	1,102	0.3	4.0	6.8	105	1.9
	Total Proved	-	-	-	-	-	-
Total		1,102	0.3	4.0	6.8	105	1.9

• Refer Competent Persons statement and technical details at end of Activities Report.

This additional ore can be accessed utilising mine development currently being installed in accordance with the original mine plan. The economics of this additional material has been

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

==> picture [105 x 40] intentionally omitted <==

assessed on an incremental cost basis and does contribute positive cash flow. The increased ore tonnage can be extracted with minimal additional work and means that there will be a higher utilisation of the Hellyer Mill each year; i.e. increasing 25% to 0.5Mtpa.

2.1.2 Mine Development

At the end of the December quarter underground development had progressed into the Fossey ore body and a small amount of development ore was hauled to the Run of Mine (ROM) stockpile. Work was well advanced on completing the two ventilation rises.

A total of 584 development metres were completed in the underground during the quarter. As development advanced into the ore body on the 465 Level cross-cut in late December, very high pressure water flow was encountered at the face. Whilst the upgraded water pumping facilities were capable of handling the increased water flow, the unprecedented nature of the very localised high pressure water bearing structures necessitated a prudent approach of slowing the mine advance whilst the source and impact of the water flows was reviewed. As there were no alternative ore headings the delay resulted in a 12,000 tonne shortfall of ore mining in December, in effect a 2 week delay to the schedule announced on August 8, 2010. This shortfall has been made up in the first two weeks of January, and there are currently 3 headings in ore, 2 of which are relatively dry.

Vertical development commenced during the quarter resulting in the completion of the 3.8 metre diameter Return Airway Rise. The pilot hole for the Fresh Air Rise and emergency egress was completed and reaming to a 1.8 metre diameter width commenced in mid December.

There is currently nearly 18,000 tonnes of ore on the ROM stockpile and in January (to date) solid production progress has been achieved.

2.1.3 Hellyer Mill Refurbishment

The refurbishment of the Hellyer Mill was completed during the quarter on schedule. Commissioning of the process circuit has commenced and first ore processing is planned for January 2011.

2.1.4 Concentrate Sales & Marketing

The Company has zinc and lead concentrate sales agreements with Nyrstar Sales and Marketing AG and agreements with LN Metals International Limited for the copper-silver-gold concentrate for production from the Fossey deposit.

2.1.5 Capital Expenditure

Total capital expenditure and commitments to date for the Hellyer Project is estimated to be $26.6 million vs. the budget estimate to the end of December 2010 of $25.1 million. The variance relates primarily to the upgraded water management system and bringing forward certain mobile and fixed capital equipment purchases.

2.2. QUE RIVER MINE

Mining activities ceased in September and the final small quantity of ore was delivered to MMG Rosebery in early October. Current site activities comprise rehabilitation work associated with placing the site on care and maintenance until further mine studies have been completed to assess mining and treatment of ore through the Hellyer Mill. Key components of this work comprise relocating approximately 250,000 bcm of potentially acid forming waste to backfill the PQ pit and ameliorating legacy acid mine drainage problems by filling and blocking adits and openings to the historic Que River underground workings. This work is planned to be completed in early 2011.

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

==> picture [105 x 40] intentionally omitted <==

3. SPECIAL PROJECTS

Two studies are in progress; the Hellyer Tailings Re-treatment Study is focussed on fully utilising the 1.5mtpa capacity Hellyer Mill and the Gold Recovery Study is exploring potential technologies to extract additional value through recovering refractory gold.

3.1. HELLYER TAILINGS RE-TREATMENT PROJECT

In November Company executives met with a variety of zinc smelting groups that could potentially be interested to buy the bulk lead-zinc concentrate that Bass is planning to produce from reprocessing the Hellyer tailings. These meetings were very valuable and provided an improved understanding of the changes to the concentrate specifications required to improve the payability and possibly broaden the sales market beyond just the Imperial Smelter Furnace (ISF) style operations of which there are a limited number globally; mostly in China. Therefore, despite interest in the standard Bulk concentrate material, the Company is continuing with its testwork to modify the concentrate specifications prior to continuing with marketing negotiations.

3.2. GOLD RECOVERY STUDY

Bass Metals considers there is a realistic opportunity to add a significant gold production capability to its Hellyer operations with a production target of 40k to 110k ounces gold equivalent. During the quarter the Company started on a $1.7 million Definitive Feasibility Study which is expected to take 12 to 18 months to complete. To the end of December 2010, nearly 2 tonnes of samples have been collected and prepared for metallurgical testwork and pilot studies and a testwork regime formulated ready to commence in January 2011.

4. EXPLORATION

Exploration drilling during the quarter focused on delineating Fossey East, a new lens discovered last quarter, adjacent to the Fossey deposit currently under development.

4.1. Fossey East Target Area

Six diamond drill holes have been completed from surface (HLD1015-1021) and one is in progress from underground (FUD0016). Six of these seven drill holes were targeting Fossey East for a total of 2,479 metres; HLD1016 targeted Fossey. Drill hole locations are shown in long section in Figure 1 with assays compiled in Table 2 and co-ordinates tabulated in Table 3. HLD1016 was a geotechnical hole that intersected a sub-lens of the main Fossey Zone.

After the initial Fossey East discovery in September, the additional drill holes have confirmed extensions to the mineralisation which is potentially of mineable width and grade. The highlights were HLD1015 intersecting 12.1 metres at 9.1 % zinc, 4.8 % lead, 76 g/t silver, 1.9 g/t gold and 0.6 % copper within a 30 metre zone of barite alteration (Figure 2) and HLD 1019 intersecting 15 metres at 7.4 % zinc, 4.0 % lead, 76 g/t silver, 2.8 g/t gold and 0.5 % copper (Figure 3) within a 19.4 metre wide barite zone.

Drill hole HLD1019 highlights the lensoidal nature of the Fossey East mineralisation. Drill hole HLD1020 intersected a fault and did not hit any mineralisation; HLD1021 intersected a narrow 2 metre zone of low grade stockwork mineralisation and barite alteration and highlights the potential for the Fossey East lens to extend further to the south either between these two holes or as a new lens developing further down dip as a repetition of Fossey East.

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

==> picture [105 x 40] intentionally omitted <==

Figure 1: Schematic Long Projection – drilling results to end of December.

==> picture [466 x 610] intentionally omitted <==

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

==> picture [105 x 40] intentionally omitted <==

Figure 2: 10150N schematic cross section showing drill holes HLD1014 and HLD1015.

==> picture [335 x 306] intentionally omitted <==

Figure 3: 10150N schematic cross section showing drill hole HLD1019.

==> picture [335 x 307] intentionally omitted <==

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

==> picture [105 x 40] intentionally omitted <==

Table 2: Drill hole intersections:

From (m)	From (m)	To (m)	Drilled Interval (m)	Zn (%)	Pb (%)	Cu (%)	Ag (g/t)	Au (g/t)
Fossey East
HLD1014 (at >5 % (Pb+Zn) cut-off)
277.6	280.1		2.5	6.3	3.8	0.3	56	1.8
Withina zone (defined by barite alteration)
277.6	303.4		25.8	1.7	0.7	0.1	31	1
HLD1015 (at >5 % (Pb+Zn) cut-off)
301.95	314.05		12.1	9.1	4.8	0.6	76	1.9
Withina zone (defined by barite alteration)
299.85	329.35		29.5	4.7	2.3	0.3	55	1.3
HLD1017 (at >5 % (Pb+Zn) cut-off)
304.4	305.7		1.3	5.6	2.4	0.2	42	0.8
Withina zone (defined by barite alteration)
290.9	304.4		13.5	0.2	0.1	0.02	25	0.8
HLD1018 (at >5 % (Pb+Zn) cut-off) - no intercepts
HLD1019 (at >5 % (Pb+Zn) cut-off)
331.55	332.5		0.95	4	2.4	0.1	19	1.9
335.9	350.9		15	7.4	4	0.5	76	2.8
Withina zone (defined by barite alteration)
331.55	350.9		19.35	6.2	3.3	0.4	61	2.4
HLD1020 (at >5 %(Pb+Zn) cut-off) - no intercepts
HLD1021_(at >5 % (Pb+Zn) cut-off) - no _					intercepts
Fossey Zone
HLD1016 (at >5 % (Pb+Zn) cut-off)
104.5	107.5		3	10.7	6.6	0.3	340	7.2
123.8	130.7		6.9	14.2	6.6	0.6	135	1.8

1. *Significant intervals reflect interval selection criteria where an intercept generally comprises for polymetallic mineralisation at least a minimum of 3 metres downhole at a minimum assay cut-off of 5 % (Pb+Zn);

2. Drilled intersections are at a high angle to the strike and are close to true thickness.

Table 3: Drill hole details:

Hole ID	Grid* North	Grid East	Azimuth	Dip	Depth
HLD1014	10,149	5,717	275	-65	365
HLD1015	10,149	5,717	265	-70	358.8
HLD1016	10,149	5,609	342	-79	250
HLD1017	10,148	5,718	260	-65	329.6
HLD1018	10,151	5,717	285	-69	308.7
HLD1019	10,125	5,735	260	-69	390
HLD1020	10,051	5,706	268	-76.5	432.1
HLD1021	10,051	5,706	293	-76	437.9
FUD0016*	10,084	5,667	320	-69	117*

*FUD0016 in progress at the end of 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

==> picture [105 x 40] intentionally omitted <==

4.2. Hellyer Stockwork Potential*.

An exploration target* of between 3 to 5 million tonnes has been identified immediately beneath the existing Hellyer Mine workings, as several drill intersections have indicated the potential for high grade copper stringer mineralisation and larger tonnage low grade lead-zinc±( copper) as presented in Figure 4 and Table 4 and 5.

(*Note: the potential quantity of each exploration target and the respective grades are conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.)

Copper Stockwork Zone

High-grade copper intersections below the central and southern feeders at Hellyer including 4.0 metres at 12.9 % copper and 70 g/t silver (HL 029) highlight the potential for a zone with dimensions of 200 metres along strike by 5 metres wide by 200 metres down dip. This zone has a potential for approximately 0.25 to 0.75 million tonnes of mineralisation at 2 to 3 % copper.

Lead-Zinc (Copper) Stockwork Zone

Wide moderate grade lead-zinc (+- copper) drill intersections highlight the potential for a large zone of base and precious metal stockwork mineralisation, including:

• 44.7 metres at 1.7 % copper, 6 % lead, 3.3 % zinc, 113 g/t silver and 0.9 g/t gold (HL237);

• 40.3 metres at 1.9 % lead, 3.3 % zinc and 25 g/t silver (HL334); and,

• 27.2 metres at 2.1 % lead, 3.3 % zinc and 6 g/t silver (HL018).

The drill intercepts, discussed above are relatively close to the Hellyer massive sulphide mineralisation. Drill hole (HL 840) intersected 24.9 metres at 3.1 % zinc, 0.7 % lead and 8 g/t silver approximately 400 metres below the Hellyer ore body, highlighting the potential with depth. Based on the available drill data, Bass estimates that potential exists for a zone of this style of mineralisation with dimensions of 200 metres along strike by 20 metres wide and 400 metres down dip. The exploration potential is 3 to 5 million tonnes at approximately 4 to 6 % lead and zinc, with copper, silver and gold credits. Compilation work is in progress.

Table 4: Stockwork and stringer Intersections.

HOLE	**from **	to	metres	Cu %	Pb %	Zn%	Ag g/t	Au g/t
HL006*	395.93	399.75	3.8	4.9	0.1	0.04	40	0.3
HL029*	279.5	283.5	4	12.9	0.9	0.3	70	0.3
HL237*	13.7	58.4	44.7	1.7	6	3.3	113	0.9
HD114L*	2	7	5	6.1	1.5	2.6	56	-
HD110L*	4	9	5	3.5	4.1	4.9	280	-
HL015*	452	455	3	1.4	4.3	6.7	100	0.2
HL237**	13.7	58.4	44.7	1.7	6	3.3	113	0.9
HL018***	296	323.2	27.2	0.1	2.1	3.3	6.2	0.04
HL334***	68.7	109	40.3	0.6	1.9	3.3	25	0.7
HL840		291.2	316.1		0.7	3.1	8

- Copper intersections, ** - copper, lead, zinc intersections **-lead –zinc stockwork Holes suffixed with L are development rock chips.

Bass considers that successful delineation of a major resource comprising stockwork mineralisation in the footwall of the Hellyer zone could add significantly to the HMP mine life. This stockwork zone has not previously been specifically targeted as it was considered the

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

==> picture [105 x 40] intentionally omitted <==

grades were too low and the intercepts quoted are largely “tails” of historic diamond drill holes testing the Hellyer massive sulphide zone.

The Company understands that historical metallurgical testwork gave very positive recovery results due the coarse grained nature of the base-metal sulphides in the stockwork veins. Therefore at higher metal prices than between 1987 and 2000, when Hellyer was operational and with the possible utilisation of a heavy media separation plant this mineralisation has significant potential to become ore, (subject to detailed drilling and testwork).

Table 5: Drill hole collar and hole details.

Hole #	Easting AMG	Northing AMG	Azimuth AMG	Dip	RL	EOH Depth
HL006	393,461	5,396,161	289	-44	712	484
HL015	393,602	5,396,314	298	-56	693	596.2
HL018	393,350	5,396,639	107	-79	686	374.6
HL029	393,106	5,396,305	85	-69	688	310.5
HD110L	393,380	5,396,436	306	1	331	14
HL114L	393,357	5,396,564	306	4	334	23.5
HL237	393,280	5,396,398	111	-17	399	64.8
HL243	393,414	5,396,623	290	-60	397	41.3
HL334	393,331	5,396,536	112	40	400	174.2
HL840	393,650	5,396,552	237	-61	233	393

Figure 4: Hellyer Long Section – Footwall potential:

==> picture [493 x 342] intentionally omitted <==

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

==> picture [105 x 40] intentionally omitted <==

4.3 REGIONAL EXPLORATION

Bass’ current tenement position is shown in Figure 5.

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

No field work was completed on these tenements for the period.

4.3.2 Lake Margaret (EL 28/2009), BMS 70% CLY 30 %)

Analysis of the 8,777 Short-wave-infra-red spectra and 1,398 lithogeochemistry samples continued during the quarter. A geological assessment has been completed and a first pass drilling program has been designed and is planned to commence next quarter.

Figure 5: Bass Metals current tenement holdings and Joint Venture Interests.

==> picture [351 x 507] intentionally omitted <==

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

==> picture [105 x 40] intentionally omitted <==

5. CORPORATE ACTIVITIES

5.1 FINANCIAL POSITION

The Company’s closing cash position at the end of the December 2010 quarter was $9.7 million; a $6.7 million decrease from the end of the September 2010 quarter balance of $16.4 million.

The Company expects to commence concentrate sales in late January, 2011 with revenue flowing in from early February.

5.2 Hedging

Bass Metals completed a silver price hedging program In October with RMB Resources Limited, which included a $5 million cash prepayment. This involved selling forward 558,000 ounces of silver at an effective price of A$26.04 per ounce. This represents a 33% price improvement to the $19.54 per ounce silver price assumed in the Definitive Feasibility Study for the Fossey mine development. The quantity of silver sold forward equates to 27% of the payable silver planned to be recovered to concentrates and sold from the Fossey deposit.

The Company also has zinc and lead forward contracts at flat prices of A$2,460/tonne zinc and A$2,410/tonne lead for 13,656 tonnes of zinc and 8,409 tonnes of lead. This represents approximately 30% of the payable zinc and lead production from the Fossey Deposit; providing a very robust level of price certain revenue whilst retaining significant price leverage to any upside.

5.3 Financing

The Company undertook two financing transactions during the quarter to supplement its working capital position in support of the Hellyer Mine Project and other growth initiatives.

The silver transaction completed with RMB Resources included a A$5 million prepayment on the silver revenue.

In late October A$3.55 million was raised by placement of 14.2 million shares at an issue price of 25 cents per share to entities on behalf of mainly European institutional investors. The issue price was a 13% discount to the 10 day volume weighted average closing price prior to the trading halt and has added several significant European institutions to the Bass share register.

5.4 Capital Structure

During the quarter the following securities were issued:

• 15.3 million fully paid ordinary shares to sophisticated and professional investors and in lieu of payment of brokerage fees and an investor relations services retainer;

• 418,410 fully paid ordinary shares issued under the Bass Metals Ltd Employee Share Loan Scheme approved by shareholders at the 30 November 2010 Annual General Meeting ;

• 30,000 fully paid ordinary shares issued on exercise of unlisted employee options; and

• 880,000 unlisted options at various exercise prices and terms issued under the Bass Metals Ltd Employee Share Option Plan approved by shareholders on 27 November 2007.

As at the end of December 2010 the Company has 186,253,796 fully paid ordinary shares and 10,680,000 unlisted options.

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

==> picture [105 x 40] intentionally omitted <==

COMPETENT PERSONS STATEMENTS

EXPLORATION RESULTS

The information within this report that relates to exploration results 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.

MINERAL RESOURCES AND 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 Bass Metals Ltd 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.

Attachment 1: Ore Reserve and Mineral Resource Estimate Checklists Part 1: Checklist of Assessment and Reporting Criteria- Fossey Mineral Resource and Ore Reserve Estimate.	Attachment 1: Ore Reserve and Mineral Resource Estimate Checklists Part 1: Checklist of Assessment and Reporting Criteria- Fossey Mineral Resource and Ore Reserve Estimate.
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 underlain by minor stringer and disseminated mineralisation.
Tenement and land status	Fossey occurs within Hellyer Mining Lease CML103M/87 and is wholly owned by Bass Metals Ltd.
Drilling	All Bass Metals Ltd holes (27 holes in mineralisation) were diamond-drilled and NTW or NQ- sized core recovered (diameters of 56mm or 47.6mm respectively). Historic holes (14 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 Ltd drilling with close to 100% recovery in the ore zones. Similar high recoveries were achieved by historic drilling. The Fossey resource has been drilled on 25m spaced sections oriented mine grid E-W. Drill-hole spacing is approximately 20-25m along these section lines.
Logging	All drill holes have been geologically logged using standard Que-Hellyer logging codes. Wet and dry digital photographs of all Bass Metals Ltd 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 on slide film were taken.
Sampling	For both Bass Metals Ltd 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 in both the hanging wall and footwall.
Assaying	For Bass Metals Ltd drilling half core samples were submitted to Ammtec Laboratories in Burnie, Tasmania. Samples were analysed for Cu, Pb, Zn, Ag, As, Fe (triple acid digest and AAS), Au (fire assay) and Ba (pressed powder XRF). SG determination was conducted by the laboratory on each assay sample. QA-QC involved standards, blanks and duplicates (one of each every 25 samples). Identification of problems with some Ammtec data led to re-submission of all assay pulp samples,within mineralisedzones plannedfor mining, toAmdel Laboratoriesin Adelaide,

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

==> picture [105 x 40] intentionally omitted <==

	South Australia. At Amdel, modified aqua regia digest was followed by Cu, Pb, Zn, Ag, As, Fe assay by ICP and Au by fire assay. Review by independent experts recommended use of Amdel Cu, Pb, Zn, Ag, As and Fe values and Ammtec Au and Ba assays for resource estimation. Historic assays were carried out on half core at Aberfoyle’s company laboratory (now the Ammtec 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	All Bass Metals Ltd drill-hole collar locations have been measured by a contract surveyor and historic holes by Hellyer Mine surveyor.
Database integrity	The drill-hole database used comprises Bass Metals Ltd 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 within acceptable limits.
Geological interpretation	The Fossey deposit strikes grid NNW and has the broad cross sectional form of a 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 but also occurs locally in the underlying BMS zone;  BMS Zone - Underlying the massive barite zone is banded to massive BMS. Whilst the boundary of the footwall of the BMS is a sharp contact, the internal boundary between the BMS and Barite zones is a gradational grade boundary; and  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 centimetres thick.
Estimation and modelling techniques	Within the Barite and BMS zones elements were estimated using Ordinary Kriging, restricted to mineralisation domain boundaries. Variography of all elements was studied and grade continuity modelled. Due to the lower number of samples grade was interpolated into the footwall zone and the minor lenses using 3D inverse distance interpolation (power 2).
Cut-off parameters	The outer boundary of the Fossey barite and BMS zones is based on sharp geological contacts. The internal boundary between the two zones is gradational and a boundary of 4% (Pb+Zn) was chosen as the highest possible grade which provided good continuity between holes and from section to section. Immediately underlying the BMS zone several holes contain stringer vein and / or disseminated to semi-massive mineralisation. This domain was wireframed at a cutoff of 5%(Pb+Zn), although at the northern end and on 10,000N gold rich and base metal poor material was included at a 2 g/t Au cut-off.
Previous mining	No mining has yet taken place at Fossey.
Mining / metallurgical assumptions	No assumptions were made about mining factors for the resource estimation. For the reserve estimation some dilution (<4.0% Pb+Zn) is internal to the ore body and falls within the coherent stope shapes; this is classified as planned dilution. Planned dilution amounts to some 2% of the total reserve tonnage. In general, the unplanned dilution has been estimated as a 1.0 to 1.5 metre failure envelope, some of which is mineralised. The average grade and waste of this envelope has been calculated by digitising the void surrounding the planned stope into the geological block model. For the primary 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). For the pillars the failure envelope surrounding the ore is assumed to be a little more adverse as the mining of the adjacent stope has already had an impact on the rock mass thus the unplanned dilution is estimated to be 15%. In addition, an allowance has been made for dilution from the cemented aggregate fill (CAF) which forms the northern and southern walls of the stopes. This is estimated as a 0.5 metre failure/overbreak of the CAF walls. In total unplanned dilution for the pillars is estimated to 15%. Dilution grade has been determined by averaging the block model grade within the dilution envelope. Where CAF is the diluents, a zero grade has been applied. 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 95% of the diluted resource volumes as both the stopes and pillars are expected to be stable. The net result is an overall dilution (stope, pillars and development) ofapproximately12%wasteforanestimatedrecovery of95%. Theresource

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

==> picture [105 x 40] intentionally omitted <==

	base underpinning the reserve estimate contains some 6% by mass (62k 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.
Bulk density	Where no bulk density measurement was available (only 34 of 1297 assay samples in the mineralised zones) regression equations were developed to estimate bulk density from assay values. Bulk density was interpolated for each block.
Classification	Classification of resources was undertaken by taking into account data integrity, grade continuity, geological confidence and drill hole spacing.
Audits or reviews	Resource estimate was reviewed by resource consultant specialists during Hellyer Feasibility Study.

----------END----------

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	Quarter ended (“current quarter”)
31 109 933 995	31 December 2010

Consolidated statement of cash flows

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 – Hellyer Mill Refurbishment Other cash flows (including GST, Business Development, Corporate Affairs and Capital Raising Costs) Net Operating Cash Flows	Current quarter $A’000	Year to date (6 months) $A’000
	2,018 (1,047) (9,396) (2,742) (2,112) - 105 14 - (2,503) 725	5,767 (1,950) (13,994) (3,797) (3,550) - 273 (455) - (3,558) 1,153
	(14,938)	(20,111)
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)	- - (225) - - - - - (128)	- - (356) - - - - - 85
	(353)	(271)
	(15,291)	(20,382)

• 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)	(15,291)	(20,382)
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	3,606 - 5,000 - - -	3,614 - 17,000 - - -
	8,606	20,614
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 of quarter	(6,685) 16,387 -	232 9,470
	9,702	9,702

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

Current quarter $A'000 42

• 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 1.25 Explanation necessary for an understanding of the transactions All transactions with Directors and their related parties are on normal commercial terms

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

• See chapter 19 for defined terms.

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
			Nil	12,000
			Nil	Nil
	Estimated cash outflows for next quarter
	4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration		$A’000
				635
				5,208
				5,262
				824
	Total			11,928
	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) -deposit as credit support for short dated forward sales	5,536		13,642
		3,543		2,122
		-		-
		623		623
	Total: cash at end of quarter(item 1.22)	9,702		16,387

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed	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

6.2 Interests in mining tenements acquired or increased

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	186,253,796	186,253,796
	15,300,000 418,410 30,000	15,300,000 418,410 30,000	25 23.9 22	25 23.9 22
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.

Appendix 5B Page 4

17/12/2010

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	1,375,000 225,000 1,275,000 425,000 250,000 300,000 300,000 300,000 950,000 200,000 200,000 3,000,000 1,280,000 200,000 200,000 200,000	- ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐	Exercise price 27.5 cents 37.5 cents 42.5 cents 51.0 cents 37.5 cents 26.0 cents 28.5 cents 30.5 cents 30.0 cents 25.0 cents 35.0 cents 22.8 cents 22.0 cents 20.5 cents 29.0 cents 41.0 cents	Expiry date 22.12.11 31.12.11 16.10.12 31.12.12 02.11.11 31.12.12 31.12.12 31.12.12 31.12.12 01.09.13 01.09.13 22.09.13 05.07.13 11.10.14 11.10.14 11.10.14
	80,000 100,000 100,000 200,000 200,000 200,000	- - - - - -	22.0 cents 25.0 cents 35.0 cents 20.5 cents 29.0 cents 41.0 cents	5.7.13 1.9.13 1.9.13 11.10.14 11.10.14 11.10.14
	30,000	-	22.0 cents	5.7.13
	30,000	-	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 /does not* (delete one) give a true and fair view of the matters disclosed.

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 5

Appendix 5B Mining exploration entity quarterly report

Sign here: Date: .20 January 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