MCS SERVICES LIMITED — M&A Activity 2012

Dec 18, 2012

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19 December 2012

Red Gum advances acquisition of Majada Copper-Gold Project, Northern Chile

Red Gum Resources Limited (ASX: RGX, “Red Gum” or “the “Company”) reports that legal due diligence is now well advanced for nine separate mining properties currently subject to eight separate letter agreements (Letters of Intent, “LOIs”) with a number of private individuals to acquire the Majada Copper-Gold Project located 120 kilometres south of La Serena in Region IV of northern Chile.

HIGHLIGHTS

• Legal due diligence of claims constituting Majada Project now well advanced; no significant issues detected to date

• Complete due diligence expected to be completed by early January

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

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

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

• Modest acquisition costs staged over three years

• Majada acquisition reflects Company’s strategy of balancing its commodity mix in favour of copper and gold

Under the terms of the LOIs Red Gum has 60 days from the date of signature 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 decides to execute the Option Agreements, the Company will acquire the Majada Project over three years by making staged cash payments to the current Owners.

The transaction remains subject to final Board approval with closing scheduled for January 14, 2013.

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Managing Director Paul Pearson commented, “The foundation of any new acquisition is a firm legal basis of tenure. We are pleased that our legal due diligence of Majada has not highlighted any significant issues and we will continue to carefully assess all relevant aspects before making the decision to sign the binding Option Agreements”.

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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Figure 3: Location of the Majada Project in the Chile IOCG belt

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

• Manto Verde (+250 Mt @ 0.75% Cu)

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

• Mina Justa (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 Victoria Thomas, Six Degrees Investor Relations

• 61 8 8212 5724 + 61 3 9645 7567