MCS SERVICES LIMITED — Capital/Financing Update 2013

Mar 26, 2013

27 March 2013

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Consolidation of Chilean Copper-Gold Play

Red Gum Resources Limited (ASX: RGX, “Red Gum” or “the “Company”) anticipates a significant consolidation of its Latin American Copper-Gold plays, following the planned execution of its Majada Project agreements within the next few days. After successfully completing legal due diligence, the Company has notified the owners of the Majada Project that it intends to enter into eight separate and binding option agreements with them to acquire 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.

HIGHLIGHTS

• Upon signature Red Gum will have 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.

• The planned Majada Project acquisition reflects the Company’s strategy of balancing its commodity mix in favour of, and consolidating, its copper and gold plays.

• Majada Project encompasses two separate Copper-Gold mineralised trends totalling over 5 km in length.

• Target is high grade Copper-Gold mineralisation centred 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.

• Geophysical acquisition, as a precursor to drilling, is starting immediately.

Under the terms of the Option Agreements, Red Gum will have 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.

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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.

Managing Director Dr Paul Pearson commented, “We are delighted to announce that the Company intends to proceed with the signature of the binding Option agreements as soon as possible to acquire the Majada Copper-Gold Project. Copper and Gold are key commodities and Majada represents a significant cornerstone in consolidating our position in an area which, though relatively unexplored, represents an excellent growth opportunity in the coastal IOCG Belt in Region IV in Chile. The proximity to numerous large copper-gold-molybdenum deposits reflects the very real prospectivity of this region (see accompanying maps).

“As testimony to the Company’s on-the-ground business development strengths it is noteworthy that Red Gum’s team has managed to amalgamate and negotiate the acquisition of Majada on favourable terms. We intend to lose no time, and initial geophysical exploration involving magnetics and induced polarization surveys, is due to start this week and a rig has been contracted to commence drilling in April 2013.”

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. 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.

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.

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Within this zone, historical IP geophysical surveying has mapped a 150200 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 1: Location of the Majada Project in the Chile IOCG belt

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Figure 2: More Detailed Location of the Majada Copper-Gold Project

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).

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

• 61 8 8223 1680