MCS SERVICES LIMITED — Interim / Quarterly Report 2015

Oct 28, 2015

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Activities Report & Cash Flow Statement For the 3 months ending 30 September 2015

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Page 1

Quarterly Activities and Cash Flow Statement

For the 3 months ending 30 September 2015 ( Period )

Red Gum Resources Limited ( Red Gum ) ( Company ) (ASX: RGX ) is pleased to present it activities statement and cash flow for the Period.

CORPORATE UPDATE

On the 3[rd] of August 2015 Red Gum announced that it had entered into Binding Agreements to acquire 100% of MCS Security Group Pty Ltd and John Boardman Pty Ltd (trading as Intiga Security), together these acquisitions represent the “Transaction”. The businesses specialize in asset security at major commercial property sites and retail shopping centres, sports stadiums, construction sites, and other ancillary sectors such as events.

Consideration of the various shareholder resolutions required to approve the Transaction took place at a General Meeting on the 28[th] October 2015 when all resolutions were approved subject to Completion, which is expected during November 2015. One of the resolutions approved a change of name for the Company to MCS Services Limited, which will be effective from Completion.

Completion of the Transaction is subject to a re-compliance prospectus (“Prospectus”) for the purposes of satisfying Chapters 1 and 2 of the Listing Rules, and to satisfy ASX’s requirements for re-quotation of the Shares on the Official List, following a change to the nature and scale of the Company’s activities, plus a fund raising. The Prospectus was released to the ASX on the 26[th] October 2015 and placed on the Company’s web site at www.redgumresources.com, and has been made available to shareholders in accordance with their stated preferences.

CHILEAN OPERATION

The directors are conducting a strategic review of the Company’s Chilean interests and will meet all minimum commitments on the project to ensure the interests remain in good standing until a decision has been made. The directors believe this minimal expenditure commitment to the Chilean operation is consistent with direction of the Company put to the market by the previous board and management.

CASH AT THE END OF THE PERIOD

Cash at 30 September 2015 amounted to $1,205,847.

Attached is the Appendix 5B Consolidated Statement of Cash Flows for the period from 1 July 2015 to 30 September 2015.

For, and on behalf of, the Board of Directors of the Company,

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Josh Puckridge Executive Director

Red Gum Resources Limited Contact: +61 (0) 452 440 100

Page 2

ASX Listing Rule 5.3.3 tenement details

Tenement reference and location	Nature of interest	Interest at beginning **of quarter **	Interest at end of **quarter **
Cerro Huancash Peru	See below a)	100%	-
Chongos A Peru	See below a)	100%	100%
Chongos B Peru	See below a)	100%	100%
Chongos C Peru	See below a)	100%	100%
La Negra Chile	See below b)	100%	100%
Majada Chile	See below c)	See c)	See c)

Nature of Interest - Notes

• a) The Company through its wholly owned subsidiary, Red Gum Resources (Peru) Pty Ltd holds 100% beneficial interest in the shares in Central Peru Resources (“CPR”), which in turn holds 100% of the three remaining Peruvian Projects. During the period CPR sold Cerro Huancash interest for $64,739 (USD $50,000).

• b) In 2012 Red Gum exercised its option to acquire the 100% interest in the La Negra Project which was registered on a 100% basis on 19 July 2012.

• c) In March 2014 the Company notified each of the individual nine concession holders that it intended to give notice of its intention to withdraw from the Option Agreements entered into in March 2013. That agreement provided that by making staged, six monthly, optional payments totalling 679.5 million Chilean pesos (A$ 1.44 million at the then exchange rate) to the owners over a 3 year period from the date of signature, the Company could earn a 100% interest. After withdrawing from those agreements the Company no longer has any financial obligations concerning the Project and in view of the announced anticipate change in fundamental business activities no longer seeks to pursue this project.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name of entity

RED GUM RESOURCES LIMITED

Quarter ended (“current quarter”) ABN 66 119 641 986 30 SEPTEMBER 2015

ABN

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 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 (provide details if material) Transaction costs (payments)/refund Net Operating Cash Flows	Current quarter $A’000	Year to date (3 months) $A’000
	- (7) - - (121) - 4 - - 113	- (7) - - (121) - 4 - - 113
	(11)	(11)
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	- - - - - - - - -	- - - - - - - - -
	-	-

• See chapter 19 for defined terms.

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Appendix 5B Page 4

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

	Current quarter $A’000	Year to date (12 months) $A’000
1.13 Total operating and investing cash flows (carried forward) 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 - convertible loan 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other –share issue costs Net financing cash flows	(11)	(11)
	- - - - - -	- - - - - -
	-	-
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 ofquarter	(11) 1,217 -	(858) 2,075 -
	1,206	1,217

Payments to directors of the entity, associates of the directors, 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
		55
		-
1.25	Explanation necessary for an understanding of the transactions
	Cash payment in respect of directors’ gross remuneration and fees, including consulting fees.

• See chapter 19 for defined terms.

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Appendix 5B Page 5

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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 standby arrangements	Amount available $A’000	Amount used $A’000
	Nil	Nil
	Nil	Nil

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	4
	-
	-
	220
Total	226

• See chapter 19 for defined terms.

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Appendix 5B Page 6

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	1,206	1,217
	-	-
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	1,206	1,217

Changes in interests in mining tenements and petroleum tenements

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased	Tenement reference and location	Nature of interest (note(2))	Interest at beginning ofquarter	Interest at end of quarter
	n/a	n/a	n/a	n/a
	n/a	n/a	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

• See chapter 19 for defined terms.

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Appendix 5B Page 7

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

	Total number	Total number	Number quoted	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.3 +Ordinary securities	55,610,212		55,610,212
7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs		Nil		Nil
7.5 +Convertible debt securities Convertible loan 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted		Nil		Nil
		Nil		Nil
7.7 Options (description and conversion factor) RGXO RGXAOA RGXAK 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter		1,391,730 4,000,047 113,634 5,505,411		1,391,730 4,000,047 113,634 5,505,411	Exercise price $4.40 $0.44 $6.60	Expiry date 01/03/2016 15/11/2017 30/06/2016
		Nil		Nil
		Nil		Nil
		Nil		Nil
7.11 Debentures (totals only)		Nil		Nil
7.12 Unsecured notes(totals only)		Nil		Nil

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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 5).

2 This statement does /does not* (delete one) give a true and fair view of the matters disclosed.

29 October 2015 Sign here: ............................................................ Date: ............................ (Company secretary)

Mr Malcolm Lucas Smith

Print name: .........................................................

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 and petroleum 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 or petroleum 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 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting 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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• See chapter 19 for defined terms.

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Appendix 5B Page 9