MINREX RESOURCES LIMITED — Interim / Quarterly Report 2011

Jan 26, 2012

Minrex Resources NL LinQ House 17 Ord Street West Perth WA 6005

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Quarterly Report

31 December 2011

HIGHLIGHTS

• The Company was admitted to the Official List of the ASX on 7 November 2011.

• A preliminary exploration program has commenced at the Deflector Extended prospect, near Yalgoo in Western Australia.

• Preparatory investigations have included consolidation of previous regional and local exploration activities.

• A preliminary site appraisal was undertaken by the Company’s technical team, in conjunction with exploration consultants, as part of a detailed preliminary review.

• Pathfinder Exploration Pty Ltd (‘Pathfinder’) has been selected to undertake a preliminary auger (rock chip) and MAGLAG sampling survey at the Deflector Extended prospect.

• Sample analysis is to be undertaken by ALS Laboratories in Perth, W.A.

• Cash on hand as at 31 December 2011 is $3.074 million.

Overview

Projects

Minrex Resources NL (‘Minrex’ or ‘the Company’) has retained Pathfinder to carry out an initial near surface geochemical exploration program at its Deflector Extended Gold Project. As such, Pathfinder has commenced an auger drill and MAGSAM 3000® rock and soil sampling program at the Company’s Deflector Extended prospect. The program will provide multi-element geochemical coverage of the tenement and ensure that all commodity possibilities are covered including typical granite associated elements – W, Mo, Sn, calcrete U, in addition to Au and Cu. A total of 192 holes have been planned based on a 200 m x 400 m grid - while MAGLAG samples will be collected on a 100 m x 400 m grid (Figure 1).

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Figure 1: Proposed Exploration Geochemical Coverage – Deflector Extended

Auger Drilling + MAGLAG Program

Pathfinder’s auger rig (Figure 2) is capable of drilling from 5 m to 10 m through soils, weathered saprolite and hardpan units. Using an initial 1.8 m auger head rod with 10 cm spiral bit, 30 – 40 x 6 m holes can be drilled per day based over the proposed grid. Bottom-hole chip samples will be retained for geological logging purposes and follow-up alteration studies.

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Figure 2: Pathfinder Exploration Auger Drill Rig

The base of the calcrete / ferruginous REDOX or upper saprolite horizon will be targeted and sampled. Initial uranium / thorium / potassium spectral analyses will be conducted over interface, calcrete and bottom holes samples using a Niton handheld XRF.

MAGSAM 3000® samples represent a proven method for detecting trace metal concentration in the regolith, and can be analysed for a multi-element suite, using various partial digestion techniques. A recently developed proprietary micro-cyanide leach (MCL) has also been used to analyse for gold and PGE at parts per trillion (ppt) levels.

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Figure 3: MAGSAM 3000® Rare Earth Magnetic Fraction Sampler

The MAGSAM® rare-earth magnetic sampler was developed by Pathfinder to provide an additional exploration geochemical tool that can be applied to detect subtle geochemical anomalies in arid and tropical terrains. There is evidence that the application of the MAGSAM®

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by Independence Group helped to locate the Tropicana Gold deposit, east of Kalgoorlie in Western Australia.

The Company is continuing to appraise its Heemskirk Tin Project in Tasmania for the application of appropriate exploration programs.

Corporate

Official quotation of the Company’s securities took place on the ASX on 11 November 2011, following a successful capital raising of $3.5 million before costs. The Company has 17,500,001 fully paid ordinary shares and 17,500,000 partly paid ordinary shares on issue. As at 31 December 2011 the Company had available cash of $3.074 million.

For further information contact:

Richard Procter Non-Executive Chairman T:+61 8 9488 8888 F:+61 8 9481 0666 info@minrex.com.au

About Minrex

Minrex has two principal projects. The Deflector Extended Gold Project is located within the Gullewa Greenstone Belt, south of Yalgoo in Western Australia. Mineralisation is exclusive to sulphidic or auriferous (coarse gold) quartz veining. Historical production commenced in the region in 1897 from the Daisy, Shannadoh, Gullewa Queen, Monarch, Phoenix, Victory United, Golden Stream, Mugga King and Mugga Queen Mines to the south west of the Deflector Extended Gold Project area. This historical production continued into the early 1940’s. During this period a total of 35,726 ounces of gold was produced from a total of 24,000 tonnes of ore at an overall grade of 46.3g /t Au. The Deflector Extended Gold Project has received cursory regional exploration including soil geochemistry surveys, rock chip sampling and RAB/AC drilling. Overlapping structural and soil geochemistry anomalies at Deflector Extended are the compelling exploration targets to be investigated by Minrex.

Within the Heemskirk Tin Project historical exploration is limited to no-systematic prospecting activities and has only focussed on surface mineralisation. The most substantial exploration efforts have focussed on the Peripatetic mine which consists of five adits, three shafts and numerous small open pits. Numerous historical workings within the project area present a number of opportunities to evaluate. Detailed mapping and geochemical sampling will be conducted across the prospect.

Competent Persons Statement:

The information in this announcement that relates to Exploration Results is based on information compiled by Dr Geoffrey Booth, Consulting Geologist. Geoffrey Booth is employed as a consultant for Minrex and is also a Fellow of the Australasian Institute of Mining and Metallurgy and 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”. Geoffrey Booth 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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Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining 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

Name of entity

Name of entity
MINREX RESOURCES NL
ABN 81 151 185 867	Quarter ended (“current quarter”)
81 151 185 867	31 DECEMBER 2011

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) – Start up costs for business Net Operating Cash Flows	Current quarter $A’000	Year to date (2 months) $A’000
	(21) - - (138) - 9 - - (205)	(21) - - (138) - 9 - - (205)
	(355)	(355)
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)	- - - - - - - - -	- - - - - - - - -
	-	-
	(355)	(355)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(355)	(355)
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) – costs associated with listing and raising equity Net financing cash flows	3,675 - - - - (246)	3,675 - - - - (246)
	3,429	3,429
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	3,074 - -	3,074 - -
	3,074	3,074

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
		19
		-
1.25	Explanation necessaryfor an understandingof the transactions
	N/A

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

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1	Loan facilities
3.2	Credit standby arrangements

Amount available		Amount used
$A’000		$A’000
	-		-
	-		-

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	200
	-
	-
	50
Total	250

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)	12	-
	3,062	-
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	3,074	-

Changes in interests in mining tenements

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

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

6.2 Interests in mining tenements acquired or increased 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.	6.2 Interests in mining tenements acquired or increased 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.	6.2 Interests in mining tenements acquired or increased 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.	6.2 Interests in mining tenements acquired or increased 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.	6.2 Interests in mining tenements acquired or increased 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	N/A
	N/A
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	17,500,001 17,500,000	17,500,001 -	N/A 20 cents	N/A 1 cent
	17,500,001 17,500,000 -	17,500,001 - -	N/A 20 cents -	N/A 1 cent -
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	N/A
	N/A
7.7 Options (description and conversion factor) 7.8 Issued during quarter	N/A		Exercise price	Expiry date
	N/A

• See chapter 19 for defined terms.

Appendix 5B Page 4

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Appendix 5B Mining exploration entity quarterly report

7.9 Exercised during quarter 7.10 Expired during quarter	N/A
	N/A
7.11 Debentures (totals only)	N/A
7.12 Unsecured notes(totals only)	N/A

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.

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Sign here: Company Secretary Print name: Pierre Malherbe

Date: 27 January 2012

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 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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