KING RIVER RESOURCES LIMITED — Interim / Quarterly Report 2012

Apr 29, 2012

HIGHLIGHTS FOR THE QUARTER 3 0 A PR IL 2 01 2

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Q UARTERLY A CTIVITIES REPORT
31 MARCH 2012
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METALLURGICAL TESTWORK & SCOPING MODEL COMPLETED

ASX Code: SPM

Capital Structure:

Shares on Issue: 130.7m Options on issue: 11.75m Exercise Price: 20c – 80c Market Cap: $31m (24c)

Financial Position:

Cash & Debtors: $1.6m (at Quarter end)

Board of Directors:

Non Executive Chairman: Anthony Barton

Non Executive Director: Derek Carew-Hopkins

Non Executive Director: Leon Charuckyj

Executive Director: Richard Wolanski

Projects:

Speewah Dome, 575 km2

Location: Kimberley, WA

Resources:

Titanium/Vanadium:

4.7 Billion tonnes @ 0.30% V2O5 and 2% Ti at 0.23% V2O5 cut-off grade)

Fluorite: 6.7 Million tonnes @ 24.6% CaF2 (at 10% CaF2 cutoff grade)

Metallurgy:

Recovery from concentrate

• Ti (+91.1%)

• V (+94.6%)

• Fe (+97.0%)

Purity of end products

• TiO2, Fe2O3 (+99%)

• V2O (+94%)

Other prospects:

Copper/Gold/Silver & Lead PGE+Au

Scoping study released 23 April 2012 supported the potential for a significant and highly profitable future mining project that generated +90% recoveries of Titanium (Ti), Vanadium (V) and Iron (Fe) as 3 separate high grade end products.

		Scoping Model Summary
		Target production (Key products)	75,000 tn TiO2, 12,400 tn V2O5
		By Products (Production Credits)	410,000 tonne Fe2O3(Hematite),
			200,000 tonne (NH4)2SO4(Ammonium Sulphate)
		Mining Ore (Annual)	4.2 million tonne
		Mine Life	+100 years
		Production of Concentrate per year	550,000 tonne
		Recovery from Concentrate	Ti (91.1%); V (94.6%); Fe (97.0%)
		Indicated Purity of End Products & Forecast	TiO2(+99%) US$3,750
		Prices (per tonne)	V2O5(+99%) US$13,500
		Annual Revenue	Fe2O3(+99%) US$160 (NH4)2SO4US$275 US$569 million
		Cost to Create 1 tonne Concentrate Feedstock (Stage 1)	US$166 per tonne
		Transport/ Royalty/ Technology Costs Cost Mixed Chloride Leach & Recovery (Stage2)	US$145 per tonne US$341 per tonne
		Total Annual Operating Costs	US$359 million
		Net Annual Operating Cashflow (EBITDA)	US$210 million
		Capital Expenditure	US$896 million
		Payback Period	4-5 years
		Internal Rate of Return (IRR)	23.4%
		Conceptual project valuation	US$1.4 Billion

SIGNIFICANT RESOURCE UPGRADE

The Company released a significant increase in Mineral Resources of the combined Speewah Titanium/ Vanadium deposit within the 100% owned Speewah Project.

The Speewah deposit represents 3 large Resources (Central, Buckman and Red Hill) on the Speewah tenements. This upgrade represents:

• 32% increase to the total combined Resource at Speewah;

• 34% increase to the Measured and Indicated Resources at Speewah.

The total combined Mineral Resource has been updated to include all three deposits at Central, Red Hill and Buckman (Table A) (Figure 1). The combined Measured, Indicated and Inferred Resource total is 4.7 Billion tonnes at 0.30% V2O5 and 2% Ti (at 0.23% V2O5 cut-off grade).

GRANT/REBATE FUNDING PENDING

The following Grants/rebates funding are due to be received in the coming weeks:

• 2011 Research & Development Rebate $745,000

• • 2011/2012 Exploration Incentive Scheme (2[nd] Stage) $ 30,000

END OF HIGHLIGHTS

BACKGROUND & SYNOPSIS OF SPEEWAH METALS LTD

Speewah Metals Ltd has established a portfolio of 100% owned tenements covering approximately 575 square kilometres in the East Kimberley region of Western Australia (“Tenements”).

Since Speewah was listed on the ASX in 2007, the company has focused on exploring an extensive zone of vanadiferous and titaniferous magnetite mineralisation. This exploration has delivered Australia’s largest titanium/vanadium in magnetite resource and a high grade Fluorite resource. The projects have advanced beyond exploration and have entered the feasibility and development phase.

The Titanium/ Vanadium/ Hematite Project represents the major asset and value add project for shareholders. Metallurgical studies have significantly reduced technical risk associated with the acid leach and solvent extraction processing technique and enables a focus towards development of a significant mining operation.

Initial planning envisages a mining /processing operation that produces a minimum of the following end products:

• Titanium Dioxide (TiO2) 75,000 tonnes per year

• Vanadium Pentoxide (V2O5) 12,400 tonnes per year

• • Hematite (Fe2O3) 410,000 tonnes per year

• Ammonium Sulphate (NH4)2SO4 200,000 tonnes per year

Each of the end products is expected to be produced at high grade purity levels of >98% which would enable Speewah to secure premium pricing for the end products. The recovery process and testwork confirms that modular development of a mine and process facility could see Speewah commence at lower target production levels than were used in the attached financial model and then be scaled up to match capital availability and product demand.

Subject to adequate funding, the objectives for the next 12 months include:

1. Construction and completion of a pilot plant processing facility to demonstrate titanium/vanadium/hematite flowsheet and produce marketing sample to attract off-take and investment/strategic partners;

2. Input pilot plant results into pre-feasibility studies that will deliver optimised flowsheet, operating, and capital cost estimates that have the potential to significantly increase the existing project valuation of US$1.4 Billion.

3. Delivery of the following development approval requirements:

4. a. Achieving Reserve status on Titanium/Vanadium in magnetite Resource;

5. b. Mining Lease;

6. c. Mining Agreement with landholders;

7. d. Application for Environmental Impact Assessment.

8. Commencement of definitive feasibility studies on Titanium/Vanadium/Hematite project.

These objectives are designed to reduce commercial risk and facilitate mine development.

RESOURCES

The Speewah tenements contains one of the world’s largest undeveloped titanium/vanadium in magnetite deposits with combined Measured, Indicated and Inferred Resources totaling 4.7 billion tonnes at 0.30% V2O5 and 2% Ti (at 0.23% V2O5 cut-off grade) in 3 deposits. The Central, Red Hill and Buckman (Appendix A) (Figure 1) deposits, include:

• Measured Resource of 322 Mt at 0.32% V2O5 and 2% Ti;

• Indicated Resource of 1,054 Mt at 0.33% V2O5 and 2% Ti, and

• Inferred Resource of 3,335 Mt at 0.29% V2O5 and 2% Ti.

Metallurgical testwork has confirmed that upon separation of a magnetite concentrate the outstanding feature of the Resource is that the upgraded concentrate assays at 54.2% Fe, 2.48% V2O5 and 14.9% TiO2.

With its flat lying geometry, extensive outcrop at surface and up to 80 metres thick, the deposit has the potential for large scale mining on a low strip ratio over the long term.

The tenements also contain a high-grade, high-quality fluorite deposit with Indicated and Inferred Resources totaling 6.7 million tonnes at 24.6% CaF2 (at 10% CaF2 cut-off grade), comprising an Indicated Resource of 4.1 million tonnes at 25.3% CaF2 and an Inferred Resource of 2.6 million tonnes at 23.6% CaF2. See Appendix A for Resources details.

TENEMENT OVERVIEW

Figure 1 below shows the Speewah tenements with existing Titanium/Vanadium Resources.

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Figure 1: Geology of the Speewah Dome showing location of the Titanium-Vanadium Mineral Resources

PRE-FEASIBILITY STUDIES AND FURTHER TESTWORK

Completion of the Scoping studies allows commencement of pre-feasibility studies during 2012. Subject to adequate funding further metallurgical testwork is also planned that aims to add value and de-risk the project. This will involve:

– Stage 1 Beneficiation of Ore to Magnetite Concentrate

Production of a titanium/vanadium magnetite concentrate represents the 1[st] stage of processing. Testwork will consider ore variability, feedstock optimisation and tailings characterisation to refine the JORC resource and mine life calculations. This work will also support development of a tailings plan, footprint calculation and Mining Lease application.

Crush and grind testing will be completed to optimise the process and potentially provide significant operating and capital cost savings. Consideration of economic factors to upgrade the resource to Reserve status will be undertaken.

Stage 2 – Mixed Chloride Leach & Solvent Extraction Plant: - Pilot plant testing of the mixed chloride leach and solvent extraction process to produce high grade end products including TiO2 and V2O5. The pilot plant testing will:

• Enable process flowsheet design to deliver operating and capital cost estimates at a feasibility level;

• • Refine metallurgical recoveries;

• Confirm end product purities;

• Provide products for market evaluation;

• Provide solid and liquid samples for Environmental Impact Assessment.

ADDITIONAL SENIOR TECHNICAL HUMAN RESOURCES

With the transition from exploration to project development Speewah has commenced the process of securing additional senior technical people. Speewah is actively recruiting human resources that will assist with the next key pre-feasibility, development approvals and mine construction objectives that are part of the key objectives of the Company.

ACCESS, TENURE, APPROVAL AND LOGISTICS WORKS

Mining Lease - An application for a Mining Lease is planned following analysis of the flowsheet generated from the Scoping studies to determine footprint of the combined mine site and tailings areas. The determination of this factor is the only matter outstanding as the company has already compiled other information necessary to support the application for a Mining Lease.

Mining Agreement - Negotiation of a Mining Agreement with landholders has commenced and has achieved significant progress. Speewah will continue to work with traditional owners to deliver a beneficial and equitable outcome.

Environmental Application - Fieldwork has been completed on Flora and Fauna studies on the Central Deposit Resource. This work supports completion of the application for environmental assessment.

Aboriginal Heritage Survey was completed and approved in 2010 over proposed initial mining area of the Central Deposit. This represents a major step towards development of a mining operation at Speewah.

Logistics - Scoping studies indicates that transporting the magnetite concentrate to Wyndham for further processing or loading onto barges before being loaded onto larger ships away from the port is likely to be the most efficient method to transport large quantities of product for export. This transport and shipment method is being used by a nearby iron-ore mine and confirms the feasibility and proof of concept of this transport method for Speewah. Port loading facilities with spare capacity exist in Wyndham and have the ability to link Speewah to nearby Asian markets.

OTHER PROSPECTS - COPPER/GOLD AND FLUORITE AND PGE+AU

Copper/Gold– Following completion of the VTEM aerial survey, soil sampling and mapping in 2011, a series of targets were generated that were drilled for Cu/Au potential. The best intersections achieved through the exploration were in diamond drill holes SDH11-1 and SDH 11-17, both drilled into the G Vein structure of the King River Fault Zone, approximately 300m east of B Vein of the ABCE fluorite deposit:

• 1 metre @ 1.38% Cu; (SDH11-17 257-258m, collar 391131mE, 8185529mN, dip -60°E);

• 18 metres @ 0.31% Cu; (SDH11-17 76-94m, collar 391131mE, 8185529mN, dip -60°E); and

• 3 metres @ 0.45% Cu; (SDH11-1 492-495m, collar 390955mE, 8185592mN, dip -60°E).

Other drill holes did not intersect significant mineralisation during the 2011 programme. The presence of a consistent Cu/Au background, especially in the magnetite gabbro, has made target identification and selection difficult. The Cu/Au opportunity remains largely untested and there remains significant exploration potential on the Speewah tenement.

Fluorite – Drill results have identified fluorite rich intersections and extensions of the existing fluorite resource. This has lead to the discovery of a new fluorite vein along the east contact of the King River Fault and there are a number of new drill intersections of fluorite veins that are not part of the existing resource. The Exploration Target[*] for fluorite deposits, in addition to the existing resource of 6.7Mt at 24.6% CaF2, is an additional 2 to 4Mt at 20-25% CaF2. Fluorite could be mined along with a potential Ti/ V/ Fe operation to share infrastructure and improve project economics.

PGE+Au – A PGE+Au reef that runs through the existing Titanium/Vanadium resource may improve project economics of the Ti/ V/ Fe project through associated recovery.

• Note: Exploration Target is not a mineral resource and further drilling is required which may not define these tonnes & grade. The potential quantity and grade is conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if future exploration will result in the determination of a mineral resource.

PROMOTION OF THE SPEEWAH OPPORTUNITY

Titanium dioxide is used to make pigments for paints and ceramics for the construction industry. Vanadium is a ferroalloy used to produce hardened and tool steel. The titanium industry is many times larger than the vanadium industry.

With the increases in demand for these commodities driven by the construction and global steel production in Asia and specifically China, Speewah’s focus has been to identify development funding/investment from this region.

The strategy for the Speewah assets has been to promote the Speewah tenements potential for a multi-commodity mine with shared infrastructure (road, campsite, power, tailings and water) with focus on the very large Titanium/Vanadium magnetite deposit to identify a strategic investor or development partner.

CONCLUSIONS

Metallurgical testwork and Scoping studies confirm that the development of the Mixed Chloride Leach and Solvent Extraction Process Route for the Titanium/ Vanadium project is the primary strategic objective of the Company. Scoping study results have surpassed expectations and provide an indication of a highly valuable development opportunity for the Speewah project.

The Board is extremely encouraged by the large conceptual valuation and revenue streams suggested by the Scoping study. Focus will turn to commencement of pre-feasibility studies to refine the valuation and further de-risk the project.

Significant further project value could be added throughout 2012 via further technical studies that aim to optimise the recovery process and improve the financial model. These studies, subject to sufficient working capital, will include:

• expansion of the target production levels following an initial start up period;

• further metallurgical processing to produce a higher value pigment product from the high grade TiO2;

• mining the fluorite resource that exists near the project;

• cost reduction through testwork on crushing/ grinding and iron extraction/acid recovery.

The opportunity for modular development offers the potential for commercial operation at lower production target levels. This would significantly lower initial capital expenditure requirements and provides confidence in funding of the project.

End of Quarterly Activities Report

APPENDIX A

RESOURCES

The Speewah tenements contain the following Mineral Resources:

TITANIUM - VANADIUM

The Mineral Resource for the combined Central, Red Hill and Buckman deposits (fresh material) within the Speewah project area is presented in Table A:

Table A: Speewah Mineral Resource Estimate March 2012 (0.23% V2O5 Cut-off)

Speewah Project	Speewah Project	Tonnes Mt	V % V2O5 % Fe % Ti %
Zone	Class
High Grade	Measured Indicated Inferred	181 404 1,139	0.21 0.37 15.1 2.1 0.20 0.35 15.0 2.0 0.19 0.34 14.9 2.0
High Grade Total		1,725	0.20 0.35 15.0 2.0
Low Grade	Measured Indicated Inferred	141 650 2,196	0.15 0.27 14.6 2.0 0.15 0.27 14.5 1.9 0.15 0.27 14.4 1.9
Low Grade Total		2,987	0.15 0.27 14.5 1.9
Combined Zones	Measured Indicated Inferred	322 1,054 3,335	0.18 0.32 14.9 2.0 0.18 0.33 14.9 2.0 0.16 0.29 14.6 2.0
Grand Total*		4,712	0.17 0.30 14.7 2.0

V2O5 calculated as V%*1.785

• *Total does not include oxide material (218Mt at 0.29% V2O5 and 2.1% Ti) for which further metallurgical work is required to determine recovery.

The Mineral Resource for the each of the Central, Red Hill and Buckman deposits (fresh material) within the Speewah project area is presented in Table B:

Table B – Speewah Mineral Resource Estimate (0.23% V2O5 Cut-off)

Deposit	Tonnes Mt	V % V2O5 % Fe % Ti %
Central Buckman Red Hill	1,240 1,495 1,977	0.17 0.31 14.6 2.0 0.16 0.29 14.7 1.9 0.16 0.29 14.7 2.0
Grand Total	4,712	0.17 0.30 14.7 2.0

V2O5 calculated as V%*1.785

• *Total does not include oxide material (218Mt at 0.29% V2O5 and 2.1% Ti) for which further metallurgical work is required to determine recovery.

FLUORITE

The Fluorite resource is given in Table C. The deposit contains Indicated and Inferred Resources totaling 6.7 Mt at 24.6% (within high grade domains at 10% CaF2 cut-off grade), comprising:

• Indicated Resource of 4.1 Mt at 25.3% CaF2;

• Inferred Resource of 2.6 Mt at 23.6% CaF2.

Table C: Speewah Fluorite Prospect Mineral Resource Estimate (August 2009)

Indicated	Inferred	Total
Tonnes CaF2	Tonnes CaF2	Tonnes CaF2 CaF2
Mt %	Mt %	Mt % Mt
4.1 25.3	2.6 23.6	6.7 24.6 1.7

APPENDIX B

LOCATION

The Speewah tenements are located approximately 110 kilometres southwest of Kununurra and 110 kilometres south of the port of Wyndham in the Kimberley region of Western Australia (Figure 2). The Tenements are accessed via 35 kilometres of unsealed tracks from the sealed Great Northern Highway.

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Figure 2: Location Map

FOR FURTHER INFORMATION, PLEASE CONTACT:

Speewah Metals Limited

Richard Wolanski – Executive Director Anthony Barton – Non Executive Chairman

Level 22 Allendale Square 77 St Georges Terrace Perth WA 6000 Telephone: +61 8 9221 8055 Fax: +61 8 9325 8088

Competent Persons Statement

The information in this report that relates to Exploration Results, Minerals Resources or Ore Resources is based on information compiled by Ken Rogers who is a Member of the Australian Institute of Geoscientists. Mr Rogers, Chief Geologist of Speewah Metals Limited, compiled the technical aspects of this report relating to the Speewah Project and content of this release. Mr Rogers has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being reported on to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code). Mr Rogers consents to the inclusion in the report of the matters in the form and context in which it appears.