PATERSON RESOURCES LTD — Interim / Quarterly Report 2014

Jan 27, 2015

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Quarterly Activities Report Quarter ended 31[st] December 2014

Corporate

The Company announced the closing of its Non-Renounceable Rights Issue on 8 December 2014 with a total amount of $615,923.28 being taken up by Shareholders.

The Offer was subscribed as follows:

• $468,654.90 was subscribed by Shareholders, or parties who had acquired rights to participate in the Offer, taking up their entitlements

• $147,268.38 was subscribed by Shareholders, or parties who had acquired rights to participate in the Offer, applying for additional shares under the Shortfall Facility

making a total of $615,923.28.

This resulted in 123,184,656 ordinary shares being issued and 123,184,656 Options at an exercise price of 0.05 cents per share with an expiry date of 30 September 2015.

Since the closing of the Rights Issue the Company has received a total of $225,000 in Shortfall Applications and is working towards placing further Shortfall shares with strategic investors.

As advised in the ASX announcement of 25 August 2014 it was the Company’s intention to dispose of its 26,380,953 shares in Blumont Group Limited, listed on the Singapore Stock Exchange. Elysium subsequently monetised the entire shareholding for gross proceeds of A$850,889.

Exploration Activities

NSW

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

Development

The water monitoring bores required as part of the EIS process (as announced April 9[th] 2014) have been established and groundwater monitoring commenced during December. Coffey Geotechnics Pty Ltd (“Coffey”) have assisted the Company in establishing the bores and will create the groundwater model when sufficient data becomes available. Coffey is a recognised consultancy well-versed in the hydrogeological requirements for mine permitting in NSW.

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

Eight reverse circulation (RC) drill-holes were completed (as announced November10[th] and 24[th] 2014) as phase one of the resource development drilling over the hard-rock resource at the historical Lloyds Mine. This was also a pre-cursor to phase one of the metallurgical drilling to collect core for the bulk sample (as announced December 3[rd] 2014). A 200kg sample was collected from three diamond drill-holes and dispatched to the Bureau Veritas laboratory in Adelaide for comminution and flotation test-work.

The final phase of resource development and metallurgical drilling commences in January. The drilling will conclude with pit and infrastructure site drilling for geotechnical assessment.

Exploration

To keep operating costs to a minimum, preliminary mine site layouts have proposed plant and trainings dam infrastructure close to the anticipated open pit; these sites are also over prospective geophysics targets (as announced January 7[th] 2014). Two deeper diamond core holes will be drilled to confirm the prospectivity of the Priority 1 exploration targets (as defined in several previous announcements) 1-2 km south of the historic Lloyds Mine.

Figure 1 Chalcopyrite in HQ3 core twinning EYMRC-005; interval approaching old mining void.

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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%)

As announced on October 29[th] 2014, entered into an agreement with Horseshoe Metals Ltd (ASX:HOR). The summary details of the terms of the option to purchase are as follows:

• (a) Option Period – 2 years (to 28 October 2016);

• (b) Option Fee – Horseshoe to drill test M1 and Western Anomaly drilling targets identified by Elysium with a minimum of 2 x 250m Reverse Circulation drill holes (i.e. 1 into each target) in Year 1 of the Option Period (“Minimum Drilling Commitment”), at which point Horseshoe may elect to withdraw;

• (c) Exercise of Option – Horseshoe may exercise Option at any time within Option Period after the completion of the Minimum Drilling Commitment;

• (d) Exercise Price - $100,000 payable in cash or by Horseshoe shares (based on 10 day VWAP price from date of exercise notice), at the election of Horseshoe.

The Option Agreement was conditional upon a due diligence (“DD”) process being completed within 30 days to the satisfaction of the Company. The DD was satisfactorily completed as announced December 9[th] 2014.

Max Carling Director 28 January 2015

EYM tenements held as at 31[st] December 2015.

PermitType	Permit Number	Location	Held Via	Beneficial %	AgreementType
EL	6463	Australia,NSW	Burraga ExplorationLtd	100.0%
EL	6874	Australia,NSW	Burraga ExplorationLtd	100.0%
EL	7975	Australia,NSW	Burraga ExplorationLtd	100.0%
E	52/2569	Australia,WA	Elysium ResourcesLtd	100.0%
IUPE	421.302/2013	Indonesia,JAVA	Malang ResourcesPtyLtd	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 Zurkic BAppSc(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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