PATERSON RESOURCES LTD — Interim / Quarterly Report 2014

Oct 27, 2014

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Quarterly Activities Report Quarter ended 30[th] September 2014

Corporate

On 6 August 2014, entered into a Share Subscription Agreement with Blumont Group Ltd (“Blumont”), pursuant to which the Blumont agreed to subscribe for, and Elysium has agreed to allot and issue to Blumont, 100,000,000 ordinary shares in the capital of Elysium at an issue price of 1 cent per share (with one free option per share). The options have an exercise price of 1.4 cents each and expire 30 November 2014.

Under the terms of terms of the Subscription Agreement and in consideration of issuing the Elysium shares, Elysium subscribed for ordinary shares in the capital of Blumont. Elysium subsequently disposed of the Blumont shares raising $850,889 before costs to fund its operations.

Blumont Group Ltd is listed on the Singapore Stock Exchange trading under the symbol “BLUM”. It is a Singapore Investment Company specializing in strategic investments of steel making raw materials, base metals, agriculture, precious metals & stones and logistics infrastructure.

Exploration Activities

NSW

EL6463 (100%) EL6874 (100%) EL7975 (100%)

Development

Elysium Resources Limited (“Elysium” or "Company") (ASX:EYM) has previously announced that it is completing an Environmental Impact Study (EIS) to treat the tailings and slag dumps remaining from the mining of the historical Lloyds Copper Mine, along with an open cut at the surface of Lloyds. This work was commenced in April 2014, Flora and Fauna, Aboriginal and European heritage elements have been mostly completed.

To progress the ground and surface components of the EIS, water bores will take priority in the upcoming drilling campaign to ensure the monitoring commences as soon as possible. Up to 42 reverse circulation (RC) and diamond core holes have been planned for drilling to commence in October 2014. The program is designed to increase the confidence of the Lloyds mineral resource as a base to establishing life of mine site plans to be able to finalize the various elements in the EIS. The drilling will be carried out over two phases with the first phase comprising up to 22 holes being drilled, with phase two dependant on phase one results. Sufficient diamond coring with be completed to source sufficient sample for further metallurgical test-work for the northern slag dump and the proposed open pit over the Lloyds historical workings.

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A further 20 drill-holes have been designed to provide geotechnical information for, and sterilize the proposed sites for various infrastructure and establish up to 8 water monitoring bores. Given the results from the recent ground and airborne geophysics surveys (see "Exploration" section), the optimal areas for proposed

Elysium Resources Limited

ABN 45 115 593 005 Suite 705, 3 Spring Street, Sydney NSW 2000 PO Box H238, Australia Square NSW 1215 Phone: +61 2 9247 7744 Fax: +61 2 9247 7244 Email: info@elysiumresources.com.au Web: www.elysiumresources.com.au

infrastructure present as geophysical anomalies and therefore the "sterilization" program planned is more extensive than would generally be the case.

The resource drilling will allow for the confirmation of the resource estimate which will then allow for the elements required for a mineral reserve to be determined once metallurgical results are returned. Final topographical surveys of the slag and tailings dumps are being carried out to determine volumes for the initial potential ore to be processed. The remaining elements of the EIS, which are not believed to be time or project critical, can then be completed and in conjunction with applying for the permits to commence operations. A feasibility study is being populated with the various data as it becomes final.

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Exploration

Preliminary interpretations for the geophysics surveys completed during the first half of 2014 show numerous targets in EL6463 and single anomalies on the peripheries of the Burraga Granite in both EL6874 and EL7975.

A cluster of 3 high priority targets are defined 0.5 to 1.5km to the south of the historic Lloyds Mine. The central potassium anomaly is located in a structural corridor and presents as a potential intrusion. The Priority 1 target directly to the south-east is a remnantly magnetised potassium anomaly and the cross-cutting structures to the north could provide potential fluid traps for the suspected central intrusion. These interpretations are further supported by previously reported strong soil geochemistry over this area. The Company intends commencement of drilling in this area by October.

The Priority 2 target that extends from Lloyds in the NE direction is interpreted as a cross-cutting structure possibly providing a trap for fluids from the suspected intrusion to the south, suggesting possibly that Lloyds itself is a surface expression of a concealed system as reported previously on numerous occasions. Three further Priority 2 targets further north are possibly porphyries and / or display as cross-cutting remnantly magnetised features, which coincide with the historical North and Howards shafts. Two IP targets, lie intermittent to these (coinciding to magnetic highs), one directly to the north of Lloyds and one directly beneath the southern slag dump. The Company intends to drill the Priority 2 targets at Lloyds and directly to the north of Lloyds including below the southern slag dump in the kick-off drill program planned for October.

Priority 3 targets generally conform to the NE trending IP anomaly and require additional field work before drilling is proposed. Soil sampling is planned for these areas during the remainder of the 2014.

The group of Priority 4 targets to the north of EL6463 may relate to the gold deposits at Lucky Draw and Hackneys Creek. Structurally they appear related to the major NNW faulting corridor previously inferred as the southern extension of the Godolphin Fault which hosts the 2.5Moz McPhillamy’s Gold Deposit (refer www.regisresources.com.au) some 50km to the NW.

In EL6874 a remnantly magnetised anomaly within the Burraga Granite requires field investigation, as does a magnetic high on the SE periphery of the granite in EL7975. Mapping and soil sampling is being planned for these areas to investigate whether drilling is warranted.

The Company confirms that it is on schedule to complete the EIS during this financial year.

Indonesia – Malang Project

IUP(Industrial) number: 180/005/IUPE/421.302/2013 (earn to 67.5%)

No activity

WA

Horseshoe South Project EL52/2569 (100%)

No activity

Max Carling Director 28 October 2014

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EYM tenements held as at 30[th] September 2014.

Permit Type	Permit Number	Location	Held Via	Beneficial %	Agreement Type
EL	6463	Australia, NSW	Burraga Exploration Ltd	100.0%
EL	6874	Australia, NSW	Burraga Exploration Ltd	100.0%
EL	7975	Australia, NSW	Burraga Exploration Ltd	100.0%
E	52/2569	Australia, WA	Elysium Resources Ltd	100.0%
IUPE	421.302/2013	Indonesia, JAVA	Malang Resources PtyLtd	67.5%	Farm-in

The information in this announcement that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore reserves is based on information reviewed or compiled by Neb ZurkicBAppSc(Geol), MSc(Min & Energy Economics), a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and a Registered Professional Geoscientist with the Australian Institute of Geoscientists. Mr. Zurkic is employed by Zurkic Mining Consultants Pty Ltd. Mr. Zurkic has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mr. Zurkic consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears. Zurkic Mining Consultants Pty Ltd, which is owned and controlled by Mr. Zurkic, owns shares in Elysium Resources.

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