MCS SERVICES LIMITED — Interim / Quarterly Report 2012

Jan 30, 2013

Appendix 5B Page | 1

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Red Gum Resources Limited Operations Report for the Second Quarter

-

1 October 2012 to 31 December 2012.

HIGHLIGHTS

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CERRO HUANCASH, CENTRAL PERU

• INDUCED POLARIZATION SURVEY COMPLETED AT CERRO HUANCASH - The IP survey, completed by Fugro Ground Geophysics, featured 8 lines of pole-dipole arrays for a total of 10.1 line kilometres, with a 100 metre ‘a’ dipole spacing. The data acquired was of a very high quality and penetrated to at least 250 metres, allowing three dimensional interpretation of the geology and mineral system.

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• LARGE SULPHIDIC MINERAL SYSTEM INTERPRETED AT CERRO HUANCASH - The IP survey, when integrated with the geological mapping and geochemical sampling reported in the previous quarter, underpins the Company’s interpretation of a concealed, large scale, sulphidic mineral system at Cerro Huancash, focused along the district-scale “Ariana Corridor”. Cerro Huancash has very good discovery potential for a significant base and precious metal system at economic depths. The Company is rapidly working towards the development of drill targets and environmental permitting.

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MAJADA, NORTHERN CHILE

• RED GUM SIGNS LETTERS OF INTENT TO ACQUIRE MAJADA COPPER-GOLD

PROJECT – As part of the Company’s strategy of balancing its commodity weighting towards copper and gold, Red Gum has entered into eight separate letter agreements (Letters of Intent) with a number of private individuals for an option to acquire the Majada Copper-Gold Project located 120 kilometres south of La Serena in Region IV of northern Chile. Legal and technical due diligence is in progress.

LA NEGRA, NORTHERN CHILE

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• ACTIVELY EXAMINING OPTIONS TO FURTHER DRILL EXPLORE PROJECT – F ollowing the encouraging results the Company’s 2012 drilling program (2,522 metres), and exercise of the option to take 100% ownership of the La Negra project, Red Gum is continuing to examine a number of options in advancing the Project, including partnering with third parties.

CAPITAL

During the Reporting Period:

The Company had the following securities on issue at 31 December 2012:

Number

Quoted ordinary shares Escrowed ordinary shares Total ordinary shares Unquoted stock options on issue	44,552,795 30,425,932
	74,978,727
	4,000,000

During the Reporting Period 1,895,000 ordinary shares have been released from escrow.

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OPERATIONAL ACTIVITIES - PERU

Operational activities at Cerro Huancash during the Reporting Period can be broken down into a number of components:

Logistics

Senior Geologist Mr. Angel Rosas and Field Technician Mr. Julio Calderon continued to manage logistical and community aspects of the surface exploration program at Cerro Huancash, based out of the capital (Lima). A one year renewable community land access agreement previously signed by the Company with the local community on 1 June 2012 continues to be honoured by both parties, and the Cerro Huancash surface exploration program has continued without issues during the Reporting Period.

Field Geological Mapping

During the Reporting Period, digital compilation was completed of the 1:5,000 geological mapping, completed during August 2012 over the whole area of the Cerro Huancash Project.

Surface Rock Chip Geochemistry

During the Reporting Period, the digital database was updated with the complete results of the surface geochemical sampling program (96 rock samples) completed during the previous quarter. The program encountered high grade base and precious metal mineralisation from old workings hosted by discontinuous skarn outcrops over a +1.2 x 0.4 kilometre area. Highlights included:

• Zinc assays up to 19.0%, lead up to 17.75%, copper up to 0.89%, with 17 (41%) of the samples reporting >1% of zinc or lead (or both);

• Silver assays up to 2,460 g/t, with 12 (29%) of the samples reporting >100 g/t silver and 5 samples reporting >500 g/t silver;

• Gold assays up to 0.74 g/t, with 15 (37%) reporting >0.1 g/t gold;

Ground Magnetics

During the previous quarter Fugro Ground Geophysics, a leading Australian-based geophysical contractor with international operations and offices in five countries, conducted a ground magnetics survey consisting of approximately 75 line kilometres acquired along ENE-WSW oriented lines spaced 200 metres apart. During the Reporting Period, the results of the inversion modeling of these data have been integrated into the digital database.

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Induced Polarization

During the Reporting Period, an Induced Polarisation survey was carried out for the Company by the Peruvian subsidiary of Fugro Ground Geophysics,.

The IP pole-dipole survey consisted of 10.1 line kilometres of 100 metre ‘a’ dipole spacing, n=1 to 10, in 8 lines. GPS readings for each station were acquired using a hand-held GPS receiver. Fugro utilised an Iris Instruments ElectroPro IP receiver for data collection, and an Elliot, Huntec or Edimel transmitter with compatible motor generator for signal generation. Inversion sections for each line have been generated using the Res2Dinv software, and these can be interpreted in a more direct way as geological sections.

As reported in a ASX releases dated 19 November, 23 November and 20 December 2012, the IP results are very positive for the overall prospectivity of the project.

Highly chargeable zones are well developed and consistent over kilometric scale along the strike of the Ariana Corridor. Figure 1 shows the location of the IP lines and Figure 2 clearly conveys this consistency in the form of stacked sectional depictions of chargeability.

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----- Start of picture text -----

CERRO HUANCASH CERRO HUANCASH
OVERVIEW DETAIL OF SOUTHERN SECTOR
IP LINE LOCATIONS IP LINE LOCATIONS WITH ROCK
GEOCHEM. AND MAGNETIC ANOMALIES
FOR REFERENCE
Ariana 0 1
Norte km
Ariana
Sur
Zn+Pb+Cu
in rocks (%)
----- End of picture text -----

Figure 1: General location of IP lines, Cerro Huancash. The area shown in light blue is Red Gum’s claim.

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Figure 2: 3D Chargeability inversion sectional depictions, Cerro Huancash geophysical survey. Top figure is looking towards the southwest; bottom figure is looking towards the northeast. Anomaly colour scale is the same as Figure 3 below.

In addition to the zones of high chargeability only, Fugro’s final technical report on the survey has also drawn the Company’s attention to the zones of combined high chargeability and high resistivity. Figure 3 shows examples of a number of combined high chargeability/high resistivity features on Line 28000.

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The spatial variations in chargeability and resistivity most likely reflect a large sulphidic mineral system whose physical properties vary from place to place, partly determined by differing mineralogic combinations and by variable amounts of fracturing. The highly resistive and highly chargeable zones possibly map zones of silica stockworking with disseminated sulphides, i.e. a potential mineralized porphyry stock/s. As noted in the ASX release dated 19 November 2012, the cross-cutting geometry of some of these zones is consistent with such an “intrusive stock” model. In contrast, many of the lower resistivity zones probably reflect more permeable rocks, induced by faulting and fracturing along the mineralized Ariana Corridor.

CERRO HUANCASH PROJECT

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CHARGEABILITY INVERSION SECTION 28000 (SEE MAP)
High
Chargeability
High
Chargeability
High
Chargeability
CERRO HUANCASH PROJECT
RESISTIVITY INVERSION SECTION 28000 (SEE MAP)
High
Chargeability
High
Chargeability
High
Chargeability
----- End of picture text -----

Figure 3: Example chargeability and resistivity inversion sections, showing combined high chargeability/high resistivity features on Line 28000. For reference the highly chargeable zones (>35 mv/V) are traced as heavy dotted lines on the corresponding resistivity section. The location of the line is highlighted in Figure 1.

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Data Integration and Interpretation

As detailed above, the digital compilation and integration of the various datasets has now been completed, and they underpin the Company’s interpretation of the existence of a concealed, large scale, sulphidic mineral system at Cerro Huancash.

Geological mapping has defined a 400 metre-wide, NNW-SSE striking belt of faulting that juxtaposes slices of sporadically mineralised, skarn-altered limestones in the east against intermediate intrusive rocks and volcanics to the west. This belt is interpreted as the extension of the district-scale “Ariana Corridor”, a belt of faulting and mineralisation which strikes through Cerro Huancash and into adjacent properties. The Ariana Corridor an emerging new polymetallic trend in central Peru.

Significantly, the mapping has confirmed the importance of dioritic intrusive stocks as probable important drivers of the metalliferous skarn and replacement mineralisation present on the project. High grade base and precious metal mineralisation has been shown to occur in irregular and discontinuous bodies of sulphidic skarn cutting marble-limestone of the Jumasha Formation, many of which have been the subject of historical small scale surface exploitation. The rich surface mineralisation is interpreted as being part of a larger mineral system developed along the “Ariana Corridor”, The strongly mineralised outcrops located to date potentially represent the surface expression of a possible voluminous skarn/replacement/porphyry polymetallic target at depth and it is important to note that this segment of the Ariana Corridor has never been drilled.

There are important correlations between the surface geology, and the strong geochemical and geophysical responses defined from the recently completed surface magnetic and IP surveys. The inverse magnetic modeling of the ground magnetic data outlined a number of irregular and crosscutting magnetic zones that most likely relate to prospective skarn alteration around the regional faults and probable subsurface intrusive stocks. The IP data shows a strong correlation between the surface sulphide mineralization and underlying highly chargeable (sulphidic) zones, developed along fault systems within the Ariana Corridor. In addition, the IP survey has highlighted the existence of highly chargeable zones corresponding with highly resistive zones (possible silica), augmenting the case for the existence of a concealed porphyry system (in addition to high grade skarn and replacement styles already demonstrated on surface).

The collective results support the Company’s belief that Cerro Huancash has the potential to host significant volumes of high grade base and precious metal mineralisation at at economic depths. The Company is rapidly working towards the development of drill targets based on these results.

FUTURE ACTIVITIES

During the coming Quarter the Company intends to undertake the following operational activities in Cerro Hauncash:

• Environmental Permitting required to conduct a future drilling program.

• Definition of drill targets.

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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 have reported high grades of precious and base metals, confirming historical surface metal grades previously reported. In addition, the Company’s recently completed ground magnetic and IP surveys have identified a number of strong anomalies potentially associated with economic skarn-, replacementand porphyry-style base/precious metal mineralisation.

In recent years, Southern Peaks Mining (a private company), has completed extensive drilling immediately north on their 'Ariana' property. Given that Southern Peaks has recently made known in the public domain that significant mineralised resources exist at their Ariana Norte and Ariana Sur prospects, Red Gum has placed a high priority on further exploration at Cerro Huancash.

OPERATIONAL ACTIVITIES - CHILE

Operational activities in Chile during the Reporting Period were as follows:

Evaluation of new Copper-Gold Opportunities in Region IV of Chile

As part of the Company’s strategy of balancing its commodity mix in favour of copper and gold, efforts are being focussed on identifying new copper-gold opportunities that will feed the Company’s project pipeline into the future. An emphasis is being placed on projects with good infrastructure and proximity to existing processing operations, to take advantage of potential operational and infrastructural synergies.

The Company’s field base at Combarbala in Region IV has served as a springboard for active project generation operations and the Company’s personnel have reviewed a considerable number of third party exploration projects during the Reporting Period.

Potential Acquisition of the Majada Copper-Gold Project

The Majada Copper-Gold Project consists of 587 hectares located in the Iron Oxide Copper Gold (IOCG) Belt of northern Chile and is located 120 kilometres south of La Serena in Region IV (Figure 4). Majada represents the first new project to be potentially acquired as the continuation of the Company’s corporate strategy of balancing its commodity mix in favour of copper and gold.

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As outlined in the ASX release dated 19 November 2012, the Company has entered into eight separate letter agreements (Letters of Intent, “LOIs”) with a number of private individuals for an option to acquire the project. Under the terms of the LOIs Red Gum has 60 days to decide whether to execute formal purchase agreements (“Option Agreements”) between the respective mineral claim holders (“Owners”) and acquire 100% of the Majada Copper-Gold project. If Red Gum were to decide to execute the Option Agreements, the Company would acquire 100% interest to acquire the Project over three years by making staged cash payments to the Owners.

The Majada Project encompasses two separate Copper-Gold mineralised trends totalling over 5 kilometres in length. Numerous historical oxide pits and workings previously exploited IOCG-style Copper-Gold mineralisation along the mineralised trends, with previous sampling reporting values in excess of 1% Copper and 1 g/t Gold (Figures 5 and 6). The presence of strong bornite and chalcopyrite mineralisation in a number of old underground workings suggests that the oxide mineralisation exposed at surface passes downwards into largely unexploited Copper sulphides. There is no evidence of previous drilling and limited pre-existing geophysical data completed by a reputable contractor further supports the existence of sulphide mineralisation beneath the surficial oxides.

The transaction remains subject to the completion of legal and technical due diligence, and to formal legal documentation.

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

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Figure 5: Copper-Gold oxide pit within the Majada Project

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Figure 6: Oxide Copper-Gold mineralization from the Majada Project

Status of La Negra Project

Red Gum’s 2,522 metre drilling program conducted at the Company’s 100% La Negra Polymetallic Project in northern Chile during 2012 discovered strong breccia-hosted polymetallic mineralisation (Zinc, Lead, Copper, Silver, Gold) over broad intervals and at relatively shallow depths, potentially accessible to open pit exploitation. Zones up to several tens of metres wide of lower grade mineralization (1-3% combined zinc+lead+copper) were found to be interspersed with intermittent, metres-wide intervals of higher grade (7-21% combined zinc+lead+copper) and the strike length of the prospective breccia unit has been extended to over 1300 metres. The drilling to date has been quite widely spaced, but restricted to only about 1/3 of the strike length of the breccia zone, giving the project considerable scope for volume expansion.

Coupled with the favourable metallurgy of the sulphide mineralogy reported in an ASX release dated 13 August 2012, the Company remains very optimistic about the potential of the La Negra Project.

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Management is now actively seeking to find a partner to explore La Negra. In the meantime, the Company continues to maintain a good relationship with the local community, through its staff based at the nearby Combarbala field office.

FUTURE ACTIVITIES

Future activities planned for Chile include:

• Completion of due diligence of the Majada Copper-Gold Opportunity. Once all legal documentation has been submitted, the Company will be in a better position to assess all relevant aspects before taking the decision on whether or not to sign the binding Option Agreements.

• Continuation of evaluation and prioritization of Copper-Gold opportunities in Region IV

• Continuation of efforts to find a partner to further drill explore La Negra.

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, which 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 Oeste 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 (N.B. results yet to be validated by Red Gum). The geophysics surveying mapped a N-S striking, moderately W- dipping structure over 2.1 kilometres long and approximately 100-200 metres wide, accompanied by a strong chargeability and low resistivity IP response. The latter possibly suggests the presence of sulphide mineralisation at depth beneath the oxide zone, supported by the presence of disseminated sulphides in dump material around an old mine shaft.

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About the La Negra Project

The La Negra Lead-Zinc-Silver (Copper-Gold) Project is located within Region IV in Chile, approximately 360 kilometres NNE of the capital, Santiago and approximately 10 kilometres ENE of the mining town of Combarbalá. After choosing to exercise a purchase option from the owners in July 2012, Red Gum now possesses 100% ownership of the property, which comprises 11 separate mining and exploration concessions totaling approximately 2,600 hectares.

The La Negra property has a long history, dating back to colonial times, of sourcing high grade leadzinc-silver material. Modern day geochemical sampling verified the surface and subsurface continuity of high metal grades (zinc, lead, silver, copper, gold) over significant widths within the old workings.

Previous surface geochemistry defined a strong northerly trending (“principal”) zinc-lead-silver-gold anomaly, 1300 metre long by +400 metre wide, broadly corresponding with outcropping tourmalinebearing hydrothermal breccias that host the old workings. Strong silver, copper and gold values are concentrated in the soils of the northern segment of this principal anomaly. These, and other geochemical anomalies, are underlain by large chargeability anomalies defined in the geophysics.

During 2012, Red Gum completed a 2,522 metre drilling program at La Negra and results are reported in various previous ASX releases.

CORPORATE AND FINANCIAL

Reconciliation of expenditure

This is the second quarterly report for Red Gum Resources Limited for the year ending 30 June 2013.

Exploration and evaluation

The estimated exploration and evaluation expenditure cash flows amounted to $234,000 actual expenditure amounted to $406,656. The increase is due to the payment of the final drilling invoices from the 2012 La Negra drilling program.

Administration

The estimated administration expenditure cash flows included in the previous report amounted to $331,000, actual expenditure amounted to $253,616. The decrease is due to certain creditors being paid later than budgeted.

Cash at the end of the quarter

Cash at 31 December 2012 was $1,007,044.

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Attached is the Appendix 5B Consolidated Statement of Cash Flows for the period from 1 October 2012 to 31 December 2012.

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.................................................

Paul Pearson (Managing Director) BSc (Hons), PhD, University of QLD, Fellow of AusIMM

The information prepared on operations in this report relating to mineral exploration activities has been prepared by Paul Pearson who has significant experience 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”. Paul Pearson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity
RED GUM RESOURCES LIMITED
ABN ABN 66 119 641 986	Quarter ended (“current quarter”)
ABN 66 119 641 986	31 DECEMBER 2012

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors –sale of project 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other Net Operating Cash Flows	Current quarter $A’000	Year to date (6 months) $A’000
	- (407) - - (253) - 11 - - -	- (1,310) - - (500) - 25 - - -
	(649)	(1,785)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	- - - - - - - - -	- - - - - - - - -
	-	-
	(649)	(1,785)

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	Current quarter $A’000	Year to date (6 months) $A’000
1.13 Total operating and investing cash flows (brought forward)	(649)	(1,785)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Share Issue Costs Net financing cash flows	- - - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(649) 1,656 -	(1,785) 2,792 -
	1,007	1,007

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		108
		-
1.25	Explanation necessaryforanunderstanding ofthe transactions
	Cash payment in respect of directors’ gross remuneration and fees.

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Non‐cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

N/A

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

• N/A

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit stand by arrangements	Amount available $A’000	Amount used $A’000
	Nil	Nil
	Nil	Nil

�

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	(129)
	-
	-
	(178)
Total	(307)

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as	Current quarter	Previous quarter
shown in the consolidated statement of cash flows) to	$A’000	$A’000
the related items in the accounts is as follows.
5.1 Cash on hand and at bank	1,007	1,656
5.2 Deposits at call	-	-
5.3 Bank overdraft	-	-
5.4 Other (provide details)	-	-
Total: cash at end of quarter(item 1.22)	1,007	1,656

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Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note(2))	Interest at beginning of quarter	Interest at end of quarter
	N/A
	N/A

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference +securities(description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs,redemptions	Nil	Nil
	Nil	Nil
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through Escrow release Share issue (b) Decreases through returns of capital, buy- backs	74,978,727 Includes 32,320,932 escrowed shares	44,552,795
	1,895,000 Nil Nil	1,895,000 Nil Nil
7.5 +Convertible debt securities (description)	Nil	Nil
7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	Nil	Nil

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	Total number	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.7 Options(description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter		1,000,000 1,000,000 1,000,000 1,000,000 4,000,000	Nil Nil Nil Nll Total	Exercise price $0.25 $0.30 or $0.35 $0.35 or $0.40 $0.40 or $0.60	Expiry date 25/11/2014 25/11/2016 25/11/2017 25/11/2018
	Nil		Nil
	Nil		Nil
	Nil		Nil
7.11 Debentures (totals only)	Nil		Nil
7.12 Unsecured notes (totals only)	Nil		Nil

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does give a true and fair view of the matters disclosed.

Mr Malcolm Lucas Smith (Company secretary) ...........................................................

Date: 31 January 2013

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Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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