QX RESOURCES LIMITED — Interim / Quarterly Report 2012

Apr 30, 2012

30 April 2012

Manager of Company Announcements Australian Securities Exchange Level 6, 20 Bridge Street SYDNEY NSW 2000

By E‐Lodgement

Quarterly Activities Report and Appendix 5B for the Period Ending 31 March 2012

The Board of Black Mountain Resources Limited (Black Mountain or the Company) is pleased to provide the following commentary and Appendix 5B.

Highlights

• Settlement of acquisition of Silver and Gold Projects in the USA
• Relisted on the ASX
• Completion of $2 million capital raising
• Mine development commenced at the New Departure Project
• New results fast track development at the Conjecture Project

Silver and Gold Projects

During the quarter Black Mountain (ASX:BMZ) settled the acquisition of a 70% interest in 3 silver and gold projects which are highly prospective former producing mines in north‐western USA (Projects), subject to satisfaction of earn‐in obligations.

New Departure Project

Mine development was commenced at the New Departure Project during the quarter. Groundhog LLC of Dillon, Montana was appointed as the local mining contractor to assist with planning and preparation for exploration, underground development and mining operations at the project.

Groundhog LLC is a skilled mine engineering and management firm which also operates a mine contracting division. Groundhog engineers and staff have accessed several of the mine tunnels at the New Departure and made recommendations for stabilizing and rehabilitating the Laczay Tunnel. The Laczay Tunnel was driven in the 1970's to access the historic mine areas but fell short of reaching its objective. The existing tunnel is in relatively good shape and will require minor repair.

It is intended that the Laczay Tunnel will be used as the main underground exploration and development tunnel, and a decline will be driven from the end of the Laczay Tunnel below the downward projection of the New Departure ore shoot which produced the bulk of the high grade silver production historically. The decline is expected to be approximately 335 metres in length at a 15% decline. This decline will access the historic ore shoot approximately 50 metres below the historic workings. From the decline, other sublevels can be driven to confirm and mine remaining ore shoots that were identified in historic reports.

New Departure Development

Figure 1: Laczay Adit Figure 2: Jumbo Drills Figure 3: LHD

Crews will be mobilized at the New Departure site this quarter to begin the rehabilitation work and set‐up for the drive of the decline ramp. Part of the rehabilitation work will involve widening the initial 120 metres of the existing Laczay Tunnel so it can accommodate modern diesel equipment as well as rock bolting and wire mesh fence installation to meet safety standards for ground support. Electric and water services will also be installed. In addition, during this work, several veins that were crossed in the Laczay Tunnel will be sampled and assayed.

Drilling Program

Initially two vertical holes will be drilled into an induced polarised (IP) anomaly target southwest of the historic workings in a possible parallel mineralized trend identified by geophysical work conducted in 2011. Then four angled holes will be drilled into the projected downward dip of the historic ore shoot. Following that, four vertical holes will be drilled on the IP anomaly target to test the one kilometre potential strike length of the trend. In total, the ten hole drill program will be approximately 2500 metres and will be all diamond drilled. Subsequent to quarter end all necessary approvals have been obtained for the drilling program and drilling will commence early May 2012.

Figure 4: New Departure Proposed Mine Development and Drill Hole Program

Conjecture Project

During the quarter further data interpretation was undertaken on historical reports and data acquired. In particular a mineral reserve study on the Conjecture Mine completed in 1981 set out very detailed historical reserve block information for the mine which had been calculated from available data at that time. As a result Black Mountain has revised its plans for re‐opening the Conjecture Mine to confirm historical reserves by accessing and mining near‐surface blocks and confirming grades and tonnages.

The program for the second half of 2012 involves driving an access ramp into the mine to intersect old workings at the 61m level. This access will allow testing and initial mining of the historical reserve blocks above and below the 61m level of the mine. This will open for a block containing approximately 19,000–20,000 tonnes1 at an estimated grade of 250‐300 g/t silver1 above or at the 61m level. The historical report also identifies a block for between 16,000‐ 17,000 tonnes1 is available at an estimated grade of 290‐320 g/t silver1 between the 61m level and 120m level of the mine. Figure 5: Cross Section of the Conjecture Mine

Tabor Project

During the quarter collation and interpretation of historical data on the Tabor Project continued. The revised program for the Tabor Project will focus on general and portal repair and development in the second half of 2012.

Corporate

During the quarter, the Company was reinstated to trade on the ASX following settlement of the acquisition of the Projects and completion of a $2 million raising. Messrs John Ryan and Jason Brewer were appointed as directors of the Company and Mr Ryan will focus on the development of the Projects in the USA.

Subsequent to the quarter end, the Company completed a placement raising $500,000 and announced a loyalty option entitlement issue. The entitlement issue is scheduled to close 3 May 2012.

For and on behalf of the Board

Peter Landau Executive Director

1. These estimates of potential quantity and grade are based on historical reports and are conceptual in nature. There is insufficient exploration to define Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.

Competent Persons Statement

The information included in this release that relates to historical mining data and exploration targets is based on information compiled by Mr Gregory Schifrin. Mr Schifrin has worked as a geologist in exploration and mine development for 29 years in precious and base metal exploration and is a professional member (SME Registered Member) of the Society of Mining, Metallurgy and Exploration (SME) #4053449, a 'Recognized Overseas Professional Organization' ('ROPO') included in a list promulgated by the ASX from time to time. Mr. Schifrin has sufficient experience which is relevant to the style of mineralization 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'. Mr. Schifrin consents to the inclusion in the release of the matters based on his information in the form and context in which it appears.

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

BLACK MOUNTAIN RESOURCES LIMITED

55 147 106 974 31 MARCH 2012

ABN Quarter ended ("current quarter")

Consolidated statement of cash flows

		Current quarter	Year to date
	Cash flows related to operating activities	$A'000	(9 months)
			$A'000
1.1	Receiptsfromproductsalesandrelated	-	-
	debtors
1.2	Payments for
	(a) exploration and evaluation	(177)	(376)
	(b) development	-	-
	(c) production	-	-
	(d) administration	(359)	(580)
1.3	Dividends received	-	-
1.4	Interest and other items of a similar nature
	received	37	107
1.5	Interest and other costs of finance paid	-	-
1.6	Income taxes paid	-	-
1.7	Other Receipts (refunds)	-	-
2.7	Other	-	-
	Net Operating Cash Flows	(499)	(849)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a)prospects	-	-
	(b)equity investments	-	-
	(c) new project acquisition	-	(478)
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	Proceeds from underwriting	-	-
	Net investing cash flows	-	(478)
1.13	Totaloperatingandinvestingcashflows
	(carried forward)	(499)	(1,327)

+ See chapter 19 for defined terms.

1.13	Totaloperatingandinvestingcashflows(brought forward)	(499)	(1,327)
	Cash flows related to financing activities
1.14	Proceeds from raising	1,710	2,370
1.15	Proceeds from sale of forfeited shares	-	-
1.16	Proceeds from borrowings	-	-
1.17	Repayment of borrowings	-	-
1.18	Dividends paid	-	-
1.19	Costs associated with issue of shares	(157)	(199)
	Net financing cash flows	1,553	2,171
	Net increase (decrease) in cash held	1,054	844
1.20	Cash at beginning of quarter/year to date	3,256	3,466
1.21	Exchange rate adjustments to item 1.20	-	-
1.22	Cash at end of quarter	4,310	4,310

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	171
1.24	Aggregate amount of loans to the parties included in item 1.10	Nil
1.25	Explanation necessary for an understanding of the transactions

Payments of Directors Fees and Remuneration52Payments to Director Related Companies
		119

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 Nil
• 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

Nil

+ See chapter 19 for defined terms.

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available$A'000	Amount used$A'000
3.1	Loan facilities	Nil	-
3.2	Credit standby arrangements	Nil	-

Estimated cash outflows for next quarter

		$A'000
4.1	Exploration and evaluation	(600)
4.2	Development	(1,350)
4.3	Production	-
4.4	Administration	(150)
		(2,100)
	Total

Reconciliation of cash

Reconciliation of cash at the end of the quarter (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows.		Current quarter$A'000	Previous quarter$A'000
5.1	Cash on hand and at bank	4,310	3,256
5.2	Deposits at call	-	-
5.3	Bank overdraft	-	-
5.4	Other – Term Deposit	-	-
	Total: cash at end of quarter (item 1.22)	4,310	3,256

Changes in interests in mining tenements

		Tenementreference	Nature of interest(note (2))	Interest atbeginningof quarter	Interest atend ofquarter
6.1	Interests in miningtenements relinquished,reduced or lapsed	Nil	None

+ See chapter 19 for defined terms.

6.2	Interests in mining	25 Patented	70%interestacquired,	Nil	25 Patented
	tenements acquired or	Mining	subject to satisfaction of		Mining
	increased	Claims	earn-in obligations pursuant		Claims
			to US Project Acquisition
		108			108
		Unpatented			Unpatented
		Mining			Mining
		Claims			Claims

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	Issuepricepersecurity (see note 3)	Amount paid upper security (see
				(cents)	note 3) (cents)
7.1	Preference +securities(description)	Nil	Nil
7.2	Changes during quarter(a) Increases throughissues(b) Decreases throughreturns of capital, buybacks, redemptions	Nil	Nil
7.3	+Ordinary securities	62,812,501	35,337,501
7.4	Changes during quarter(a) Increases throughissues(b) Decreases throughreturns of capital, buybacks	35,000,000Nil	10,000,000	$0.20
7.5	+Convertible debt	Nil
	securities (description)
7.6	Changes during quarter(a) Increases throughissues(b) Decreases throughsecurities matured,converted	NilNil
7.7	Options (descriptionand conversion factor)	2,000,000	Nil	$0.30
7.8	Issued during quarter	Nil	Nil	Nil	Nil
7.9	Exercised duringquarter	Nil	Nil
7.10	Expired during quarter	Nil	Nil
7.11	Debentures(totals only)	Nil	Nil
7.12	Unsecured notes(totals only)	Nil	Nil
	Performance BasedShares	25,000,000	Nil	$0.20	N/A
	Changes during quarter(a) Increases	25,000,000	Nil	$0.20	N/A

+ See chapter 19 for defined terms.

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 4).
• 2 This statement does give a true and fair view of the matters disclosed.

Peter Landau Executive Director 30 April 2012

+ See chapter 19 for defined terms.

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 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Accounting 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.

== == == == ==

+ See chapter 19 for defined terms.