MCS SERVICES LIMITED — Capital/Financing Update 2013

Apr 9, 2013

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10 April 2013

Gearing up for Drilling at Chilean CopperGold Play

Red Gum Resources Limited (ASX: RGX, “Red Gum” or “the “Company”) is pleased to announce that following execution of all eight binding option agreements for its Majada Copper-Gold Project the Company is gearing up for an inaugural drilling program commencing in April. Execution of the option agreements now gives the Company the right to acquire 100% of nine mining claims covering nearly 600 hectares of a highly prospective portion of the Chilean IOCG Belt, located 120 kilometres south of La Serena in Region IV of northern Chile. In anticipation of this agreement Red Gum has just completed a magnetic survey and currently has an IP survey underway. Results of these surveys will be used to identify initial drilling targets. Geophysical exploration is rapidly advancing, with drilling programmed to commence before the end of April.

HIGHLIGHTS

• Red Gum has exclusive right to explore and acquire 100% of the Majada Copper-Gold Project over 3 years on favourable terms.

• Majada Project is located in the premium Iron Oxide Copper Gold (IOCG) Belt of northern Chile, close to power and road infrastructure.

• Two significant IOCG discoveries are within a few kilometres of the Project.

• Red Gum engaged in significant IP and magnetic geophysical surveys over project; drilling contractor engaged to commence drilling of at least 1500m of diamond core in April.

• Strong anomalies, consistent with subsurface sulphide mineralisation, defined beneath old copper-gold workings.

• Majada Project encompasses two separate Copper-Gold mineralised trends totalling over 5 km in length; target is high grade Copper-Gold mineralisation localised along intrusive-volcanic contacts.

• Numerous historical Copper-Gold oxide pits and workings along the mineralised trends, report values in excess of 1% Copper and 1 g/t Gold.

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Managing Director Dr Paul Pearson commented,

“We are very pleased to have signed up the Majada option and to be rapidly pushing ahead with exploration on this excellent copper-gold opportunity. Red Gum’s magnetic and induced polarization surveys, being carried out by QUANTEC, are well advanced and we have already obtained very interesting preliminary results. These data reveal broad magnetic and chargeability anomalies beneath the old copper-gold workings and strongly suggest that presence of significant zones of sulphide mineralisation starting at shallow depths and continuing below 250 metres depth. Over the coming weeks we will be integrating the geophysical data with the geological mapping in order to define drilling targets for both oxide and sulphide copper-gold mineralisation. A drill rig is booked to commence drilling before the end of April”

Figure 1 below shows the location of IP lines currently being acquired over Majada and Figures 2 and 3 show examples of the preliminary chargeability inversion sections for two separate lines. A consistent story is emerging from line to line at Majada Oeste (i.e. from north to south along the line of copper-gold workings); a broad, moderate chargeability feature occurs on virtually all lines. We interpret this feature as a subsurface zone of probable disseminated sulphides controlled by the NNW-SSE shear zone developed along the intrusive-volcanic contact that controls the surface copper-gold mineralisation.

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KEY
0 2
RGX 2013
km IP line
69600 Majada Oeste
RGX 2013
Cu-Au Project magnetics line
Inco 1999
IP line
68400 Inco 1999
magnetic survey
Claim
Boundary
Majada Este
Cu-Au Project
San Lorenzo
Manuelito Cu-Au
Cu-Au Discovery
Discovery
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Figure 1 : Location of the geophysical surveying at Majada

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Chargeability Inversion
Line 69600
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Cu-Au workings
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Figure 2: Chargeability section 69600 at Majada (see Figure 1)

Chargeability Inversion Line 68400 Cu-Au workings

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Figure 3 : Chargeability section 68400 at Majada (see Figure 1)

ABOUT THE MAJADA COPPER-GOLD PROJECT

The Majada Copper-Gold Project is located within the IOCG Belt of northern Chile, approximately 120 kilometres south of La Serena in Region IV.

As outlined in an earlier ASX release dated 27 March 2013, Red Gum has the right to earn a 100% interest in the nine claims, comprising the Project, by making staged, six monthly, option payments totalling 679.5 million Chilean pesos (A$ 1.44 million at current exchange rate) to the owners over a 3 year period from the date of signature. Should Red Gum elect to exercise the final option and acquire the properties at any time during the next 3 years, the owners would also have the right to receive an additional, and once only, payment of 600 million Chilean pesos (A$ 1.27 million at current exchange rate) upon Red Gum achieving commercial production.

The project consists of 587 hectares of third party exploitation mineral claims, distributed in two geographically separated areas; Majada Este and Majada Oeste. In addition, Red Gum has applied for new exploration claims adjoining the Majada Oeste area, totaling an additional 400 hectares. These will provide a buffer area in which the Company can evaluate the potential for additional extensions. Despite numerous shallow surface workings there is no evidence of pre-existing drilling within the Majada area.

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The Majada Este area , comprising five mineral claims totaling 267 hectares, contains a number of oxide pit workings coincident with the surface outcrop of a belt of intensely sheared and altered andesite volcanics, along the contact with a belt of granitic intrusive rocks located to the west. In addition, dump material from a number of small underground adits at topographically lower levels displays strong sulphide mineralisation (including bornite and chalcopyrite).

At Majada Oeste , comprising four claims totaling 320 hectares, a broad N-S brittle-ductile shear zone, developed along the contact between granitic intrusive rocks and andesitic volcanic rocks, controls a number of significant copper-gold pits and diggings. Previous historical exploration by a public mining company in 1999 included geochemical sampling plus magnetic and induced polarisation surveying. Surface geochemistry sampling of the oxide mineralisation, which was being exploited in the pits, reported maximum copper values up to 2.53% and maximum gold values up to 4.04 g/t. Red Gum’s geological mapping has defined a NNWSSE striking, moderately W-dipping shear zone structure over 3.0 kilometres long and +500 metres wide. Within this zone, historical IP geophysical surveying has mapped a 150-200 metres-wide zone of strong chargeability and low resistivity IP response. The geophysical response suggests the presence of sulphide mineralisation at depth beneath the oxide zone, supported by the presence of strong disseminated copper sulphides in dump material around old mine shafts.

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Figure 4: Location of the Majada Project in the Chile IOCG belt

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Figure 5: More Detailed Location of the Majada Copper-Gold Project

OVERVIEW OF INDUCED POLARISATION PROGRAM

The Induced Polarisation survey is being carried out by the Chilean subsidiary of QUANTEC, a leading Canadian-based geophysical contractor with international operations in eight countries.

The IP pole-dipole survey consists of 25.4 line kilometres of 100 metre ‘a’ dipole spacing, n=1 to 6 in 23 lines. GPS readings for each station are acquired using a hand-held GPS receiver. QUANTEC are utilizing an Iris Instruments Elrec-6 IP receiver for data collection, and an GDD TXII5000W transmitter with compatible motor generator for signal generation.

ABOUT IRON OXIDE COPPER-GOLD (IOCG) DEPOSITS

Iron oxide copper gold (IOCG) ore deposits are highly valuable concentrations of copper and gold (+/-uranium) hosted within voluminous, iron oxide -dominated gangue assemblages (typically magnetite and/or haematite). IOCG deposits are considered to be metasomatic expressions of large crustal-scale alteration events driven by intrusive activity and their gangue mineral assemblages are characterised by distinctive sodic, potassic and calcic phases. Deposits of this style tend to occur in broad linear tectonic belts, such as the Cretaceous belts of Chile and Peru. Examples of IOCG deposits in the Chile and Peru belts include:

• Candelaria, Chile (470 Mt @ 0.95% Cu, 0.22 g/t Au, 3.1 g/t Ag)

• Manto Verde, Chile (+250 Mt @ 0.75% Cu)

• El Espino, Chile (144 Mt @ 0.55% Cu, 0.22 g/t Au)

• Mina Justa, Peru (413 Mt @ 0.79% Cu).

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Competent Persons Statement

The information in this document that relates to Exploration Results 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

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• 61 8 8223 1680