MCS SERVICES LIMITED — M&A Activity 2012

Nov 27, 2012

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28 November 2012

Red Gum signs LOIs to acquire Majada Copper-Gold Project, Northern Chile

Red Gum Resources Limited (ASX: RGX, “Red Gum” or “the “Company”) is pleased to announce that it has entered into eight separate letter agreements (Letters of Intent, “LOIs”) 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.

HIGHLIGHTS

• Copper-Gold Project consists of 587 hectares located in the Iron Oxide Copper Gold (IOCG) Belt of northern Chile

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

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

• Oxide mineralisation inferred to pass down into largely unexploited Copper sulphides (bornite and chalcopyrite)

• No evidence of previous drilling; limited pre-existing geophysical data supports sulphide mineralisation beneath surficial oxides

• First new project acquisition reflecting Company’s continuing strategy of balancing its commodity mix in favour of copper and gold

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 decides to execute the Option Agreements, the Company will acquire 100% interest to acquire the Project over three years by making staged cash payments to the current Owners.

The transaction remains subject to due diligence and formal legal documentation, and final Board approval with closing scheduled for January 14, 2013.

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As indicated in the September 2012 Quarterly Report, Majada represents the first new project to be acquired as the continuation of the Company’s corporate strategy of balancing its commodity mix in favour of copper and gold. The Project hosts extensive shallow oxide pits that previously exploited the IOCG-style copper-gold mineralization. The presence of strong bornite and chalcopyrite mineralisation in a number of old underground workings suggests the presence of a zone of underlying high grade copper sulphides. This is an opportunity-driven acquisition in an underexplored segment of Chile’s IOCG Belt identified by Red Gum’s expert field team based out of the Company’s nearby Combarbala field office.

Managing Director Paul Pearson commented, “We are very pleased to have signed these LOI’s for the Majada Copper-Gold Project. Having worked on a number of IOGC projects in South America I am excited by the potential that this project represents”.

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Figure 1: Copper-Gold oxide pit within the Majada Project

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Figure 2: Oxide Copper-Gold mineralization from the Majada Project

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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

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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).

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 8212 5724 Victoria Thomas, Six Degrees Investor Relations + 61 3 9645 7567