MCS SERVICES LIMITED — Capital/Financing Update 2012

Nov 1, 2012

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2 November 2012

Next Phase of Exploration

Commences at Cerro Huancash, Peru

Red Gum Resources Limited (ASX: RGX, “Red Gum” or “the “Company”) is pleased to announce that it is about to commence its maiden geophysical program at its 100% owned Cerro Huancash Project located in central Peru. An Induced Polarisation Survey will be undertaken by Fugro Ground Geophysics and mobilization of the field crew is expected within days.

HIGHLIGHTS

• 10 line kilometres of Induced Polarisation will be acquired across zones of prospective skarn and marble alteration which are closely correlated to strong geochemical and/or magnetic anomalies.

• Survey aiming to detect the potential presence of disseminated sulphides at depth.

• Acquisition is expected to take approximately two weeks, with initial results available within approximately one month.

• Results will assist in definition of potential drilling targets along the “Ariana Corridor” – an emerging polymetallic trend that hosts significant new mineral discoveries in adjacent tenements.

Managing Director Paul Pearson commented , “Cerro Huancash is a key project for the Company and we are excited by its base and precious metal potential. Strong surface mineralisation and magnetic anomalies (defined in the Company’s recent surface exploration) are developed along the “Ariana Corridor”, a district-scale belt of faulting and skarn, and replacement-style mineralisation which strikes NNW-SSE through Cerro Huancash. In adjacent properties this trend hosts significant new mineral discoveries”.

“The principal objective of the Induced Polarisation (IP) survey is to confirm the presence of sub-surface sulphides beneath the strong rock zinc, lead, silver, copper and gold geochemical anomalies defined by the Company’s work completed to date.

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Acquisition of the IP data is a crucial step in the definition of drilling targets at Cerro Huancash, given that it has not been previously subject to either drilling or similar IP investigations. The board is optimistic on the future direction of this project, with such strong results to date, and significant interest from potential joint venture partners. Red Gum will ensure all shareholders and stakeholders are informed of progress and results when they become available.”

About the Cerro Huancash Project

Red Gum’s 100% owned Cerro Huancash Project consists of an exploration claim covering an area of 575.6 hectares. It is located approximately 45 km west of smelting facilities at La Oroya and 20 km north-northwest of Glencore’s Casapalca Zinc-Lead-Silver Mine. Cerro Huancash is readily accessible on a year round basis from the capital Lima, located 100 km to the southwest, via the Central Highway.

Previous exploration in the Cerro Huancash area revealed frequent occurrences of iron-stained gossans and mineralised float containing banded base metal sulphides over 8 km of strike length. Red Gum’s Cerro Huancash claim covers over 3 km of this highly prospective belt and given its close proximity to major mining operations at Morococha and Casapalca, this mineralised trend has been heavily targeted by exploration companies.

Geochemical assays of surface samples collected by Red Gum from Cerro Huancash reported high grades of precious and base metals, confirming historical surface metal grades previously reported (ASX announcement dated 19 September 2012). In addition, the Company’s recently completed ground magnetic survey identified a number of strong magnetic anomalies potentially associated with economic skarn and replacement-style base/precious metal mineralisation.

In recent years, Pan American Silver has reportedly conducted drilling of the mineralised trend immediately to the north of Red Gum’s Cerro Huancash claim. Pan American later completed a transaction with a private company, Southern Peaks Mining, involving the ‘Ariana’ tenements, which are adjacent to Cerro Huancash. Given that Southern Peaks has recently made known in the public domain that significant mineralised zones exist at the Ariana Norte and Ariana Sur prospects, Red Gum has placed a high priority on further exploration at Cerro Huancash.

Overview of Induced Polarisation Program

The Induced Polarisation survey will be carried out by the Peruvian subsidiary of FGG, a leading Australian-based geophysical contractor with international operations and offices in five countries.

The IP pole-dipole survey will consist of 10 line kilometres of 100 metre ‘a’ dipole spacing, n=1 to 10 in 8 lines. GPS readings for each station will be acquired using a hand-held GPS receiver. Fugro will utilise an Iris Instruments ElectroPro IP receiver for data collection, and an Elliot, Huntec or Edimel transmitter with compatible motor generator for signal generation.

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Competent Persons Statement

The information in this document that relates to Exploration Targets is based on information compiled by Dr Paul Pearson, who is Fellow of The Australasian Institute of Mining and Metallurgy and Member of the Australian Institute of Geoscientists. Dr Pearson is the Managing Director of Red Gum Resources Limited.

Dr Pearson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Pearson consents to the inclusion in this document of the matters based on his information in the form and context in which it appears and verifies that it is based on and fairly and accurately reflects in the form and context in which it appears, the information in my supporting documentation relating to Exploration Results, Mineral Resources and/or Ore Reserves.

*ENDS***

For Further information please contact:

Paul Pearson, Managing Director Victoria Thomas, Six Degrees Investor Relations

• 61 8 8212 5724

• 61 3 9645 7567