HAVILAH RESOURCES LIMITED — Capital/Financing Update 2012

Sep 17, 2012

18 September 2012

Havilah Resources (ASX : HAV)

Havilah Resources NL aims to become a significant new producer of iron ore, copper, gold, cobalt, molybdenum and tin from its 100% owned JORC mineral resources in northeastern South Australia. 113.7 million ordinary shares 25.2 million listed options 10.4 million unlisted options

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Kalkaroo Copper – Gold Project Sale Process Update

A formal sale process for the Kalkaroo copper-gold project, managed by Standard Chartered Bank, was initiated in April 2012 following a strategic review in late 2011, in which it was decided that in order to bring forward returns to shareholders, Havilah should seek to partially or wholly monetise an asset rather than pursue the long lead time of a mine development in South Australia.

The process was very professionally run, and there was a considerable amount of interest in the process with seven parties, including several majors, engaging in the second phase due diligence process which included site visits. Standard Chartered Bank attributed this interest to the fact that Kalkaroo is one of the few significant copper deposits available in a low sovereign risk mining jurisdiction that is close to existing infrastructure.

All parties were impressed by the work completed by Havilah and in general agreed with the geological interpretations and assessment of the resource. They also recognised the potential for expansion of the Kalkaroo resource and the high prospectivity for discovery of additional resources on Havilah’s surrounding 1000 km[2] 100% owned EL 4645.

However, to date, the sale process has not resulted in any cash offers for the Kalkaroo project that Havilah considers to be sufficiently attractive to accept. In considering reasons for this, Standard Chartered Bank has advised that the sale process is likely to have been impacted by a combination of factors, including :

1. Growing caution to outlay and/or ability to finance substantial cash sums for resource acquisition and development given the present and deteriorating uncertain world economic situation, as evidenced by the curtailment of expenditures by many major mining companies in recent weeks.

2. The current Kalkaroo mineral resource of 623,000 tonnes of copper and 2 million ounces of gold** (excluding any resource extension potential) is currently below the minimum 1-2 million tonne copper resource size threshold for sought by most major mining groups.

3. Escalation of mining costs in Australia over the last three years, requiring revision of earlier detailed capital and operating cost estimates in the feasibility study.

4. The need for additional metallurgical work to further test the proposed processing flow sheet design, arising from the latest resource model.

The sale process confirmed that there is a fundamental interest in the Kalkaroo project due to the positive factors mentioned above. Accordingly, Havilah remains open to a potential sale of Kalkaroo project should the economic and market environment improve such that a sale can be achieved at a price that is commensurate with the risk-adjusted return that can be realised through development of the project.

The recent capital raising means that Havilah has ample working capital to progress the development of Portia and sale of the Kalkaroo project in an appropriate time frame to maximise the value for shareholders.

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www.havilah-resources.com.au

In the meantime, Havilah continues to engage in dialogue with certain major mining groups who have expressed interest to sole risk further evaluation work, including additional drilling to increase the Kalkaroo resource, before committing to an acquisition. These discussions are against the backdrop of copper and gold prices that have continued to rise above the prices used in Havilah’s mining model, which would make Kalkaroo an even more favourable mining proposition.

For further information visit the Company website www.havilah-resources.com.au or contact :

Dr Bob Johnson, Chairman, on (08) 83389292 or email : info@havilah-resources.com.au

Competent Persons Statement

The information in this report has been prepared by geologists Dr Bob Johnson, who is a member of the Australasian Institute of Mining and Metallurgy, and Dr Chris Giles who is a member of The Australian Institute of Geoscientists. Drs Johnson and Giles are employed by the Company on consulting contracts. They have sufficient experience which is relevant to the style of mineralization and type of deposit under consideration to qualify as Competent Persons as defined in the JORC Code 2004. Drs Johnson and Giles consent to the release of the information compiled in this report in the form and context in which it appears.

**Based on a JORC resource released to the ASX on 29/2/2012 as summarised in the following table

	Tonnes (to 4 sf)	Cu equiv. grade %*	Cu grade %	Augrade **g/t **	Cut-off grade	SG
Classification
GOLD CAP Measured				0.74	0.2g/t	1.86
	18,690,000
KALKAROO CuAu Measured				0.41	0.3% Cu equiv.	2.50
	85,890,000	0.81	0.52
KALKAROO CuAu Indicated				0.33	0.3% Cu equiv.	2.65
	38,620,000	0.68	0.45
KALKAROO CuAu Total Meas & Ind				0.39	0.3% Cu equiv.	2.55
	124,510,000	0.77	0.50

Kalkaroo Metal Inventory published in the ASX announcement of 29/2/2012

Classification	Category	Tonnes	Cu tonnes	Au oz	Cu equiv. t* 958,700
GOLD CAP	Measured	18,690,000		445,000
KALKAROO CuAu	Meas & Ind	124,510,000	622,500	1,561,000 Total 2,006,000

* copper equivalent grade = copper assay in ppm + (gold assay in ppm x 6866), reflecting the fact that 1 ppm Au has an equivalent value to 6866 ppm Cu using a conversion factor of 32150.746 troy ounce per metric tonne. The gold and copper prices used in the copper equivalent calculation (US $7,980/metric tonne for copper and US $ 1,704 / oz for gold) are the average prices for the six monthly period from 1 August 2011 to 31 January 2012 sourced from World Bank commodity price data, as published on their website (www.econ.worldbank.org). Metallurgical recoveries have not been factored into the calculation, because metallurgical test work indicates comparable metal recoveries for both copper and gold.

18 September 2012 Page 2 of 2