RAREX LIMITED — Capital/Financing Update 2011

Oct 12, 2011

ASX / MEDIA ANNOUNCEMENT 13 October 2011

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Clancy Exploration Limited Phone: (02) 6361 1285
3 Corporation Place Fax: (02) 6361 1202
Orange NSW 2800 www.clancyexploration.com
Australia info@clancyexploration.com
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CLANCY EXPLORATION ANNOUNCES CONDOBOLIN GOLD PROJECT

EXPLORATION UPDATE

New prospect defined from geophysical and geochemical surveys Diamond drilling to commence on 24 October

Clancy Exploration Limited (ASX: CLY) is pleased to announce the outcome of a detailed airborne magnetics and radiometrics survey and a close-spaced regional soil survey at its 100% owned Condobolin Gold project (EL7748) in central New South Wales. A 3D Induced Polarization survey has also recently been completed.

Highlights

• Regional 100m x 100m soil sampling has defined a coherent, 2km x 2km arsenic-lead-zinc (+gold) geochemical anomaly over ridges east of Mascotte and west of Potters, defining the new “Meritilga Prospect”.

• The arsenic-lead-zinc geochemical anomalism is closely associated with gold mineralisation in the Condobolin Mineral Field.

• Detailed airborne radiometrics highlight intense potassic zone over the entire Meritilga Prospect, which indicates a large outcropping alteration zone.

• Detailed airborne magnetics show major NE and NW trending structures across the Condobolin Mineral Field, further defining controls on mineralisation.

• Modelling of the recently completed 3D Induced Polarization is underway, with early results indicating significant chargeability anomalies near the Phoenix and Mascotte prospects.

• Results will further assist planning for diamond and RC drilling which will commence on 24 October 2011.

Clancy’s Managing Director Gordon Barnes said that the new Meritilga Prospect is the “missing link” to the mineralisation story at Condobolin.

“The drilling we completed earlier this year at the Phoenix, Mascotte, Bluebell and Potters prospects showed similarities between all prospects in terms of mineralisation type and style, indicating that the prospects were probably part of the same system. “

“The detailed airborne geophysics and soil sampling we’ve now carried out has defined our new prospect at Meritilga and effectively links up Mascotte in the west and Potters in the east, confirming that the Condobolin Mineral Field is most likely one and the same system”, said Mr Barnes.

Results of detailed airborne geophysics and close-spaced geochemical surveying have defined the large 2km x 2km area between the Mascotte and Potters prospects, drilled in February 2011 by Clancy, as a new prospect, dubbed the “Meritilga Prospect”.

The Meritilga Prospect hosts several historic mine sites which were mined for gold, silver and/or lead in the early 1900’s. Field inspection at Meritilga has identified abundant quartz blows and breccia float, which also show evidence of weathered sulphides and epithermal vein textures similar to those seen at Phoenix, Mascotte and Potters.

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ASX / Media Announcement

Clancy Exploration Limited (ASX: CLY)

The Meritilga Prospect is defined, in soils, by +100ppm arsenic (spot highs up to 500ppm), +30ppm lead (spot highs up to 150ppm), +50ppm zinc (spot highs up to 210ppm), and up to 0.1 g/t gold.

Results from the soil samples were obtained via a static field portable XRF setup, whereby the instrument is contained in a workstation, and samples are dried and prepared in identical crucibles to ensure quality control. The XRF results were confirmed, and gold results obtained, by analysis carried out by ALS Orange.

A 3D Induced Polarization survey was recently completed and preliminary modelling of the data is showing significant chargeable anomalies at the Phoenix and Mascotte prospects, close to the location of RC drill holes completed in February 2011. Processing is ongoing for another 2 weeks, and the results will be utilised in conjunction with the magnetics, radiometrics and soil geochemistry to further define targets for diamond and RC drilling.

Diamond drilling is due to commence on the 24[th] October 2011, with the first holes to test for extensions of the gold lodes at the Phoenix prospect, where earlier drilling by Clancy returned intercepts of 7m @ 5.18 g/t gold from 73m, including 5m @ 6.90 g/t gold from 73m and 2m @ 14.18 g/t gold from 76m.

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Figure 1 - Potassium channel of the detailed radiometrics survey, overlain by arsenic in soil contours (data from ALS Orange). Major prospects and known historic workings (blue triangles) also shown. Coordinates GDA94 Zone 55.

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ASX / Media Announcement

Clancy Exploration Limited (ASX: CLY)

Please direct enquiries to:

Gordon Barnes Shane Murphy Managing Director FTI Consulting Phone: +61 2 6361 1285 Phone: +61 8 9386 1233 Email: info@clancyexploration.com Mobile: +61 (0)420 945 291 Web: www.clancyexploration.com

The information in this document that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Gordon Barnes who is a Member of the Australian Institute of Geoscientists. Mr Barnes is a full-time employee of Clancy Exploration Limited 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”. Mr Gordon Barnes consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

About Condobolin

Located north of the township of Condobolin, NSW, EL7748 spans two target styles including narrow structurally-hosted high grade gold-base metals, as well as epithermal gold-copper. Numerous old workings cross the area in a general north-east oriented trend. The area has been mined at various times since the early 1890’s, producing high-grade gold, copper, silver, lead and zinc.

About Clancy Exploration

Clancy Exploration (ASX: CLY) is an Australian-focused copper, gold, base metals and tin explorer. The Company’s portfolio consists of copper-gold projects in the Lachlan Fold Belt of NSW, base metal and tin projects in the Mount Read Volcanic Belt of Tasmania, Nadbuck near Broken Hill in NSW and Yalgoo, adjacent to the Golden Grove mine in Western Australia.

In NSW, Clancy has 12 wholly owned and managed projects and 7 joint venture projects which are managed by Gold Fields Australasia Pty Ltd. In Tasmania, Clancy has 2 base metal joint venture projects with Bass Metals and 2 tin joint venture projects with TNT Mines Pty Ltd (a wholly owned subsidiary of Minemakers Ltd). The Tasmanian projects are managed by Clancy's joint venture partners. This mix of Clancy and joint venture project funding allows a high level of exploration activity to be maintained, whilst prudently managing Clancy’s financial resources. Details of Clancy’s projects can be found at the Company's website: www.clancyexploration.com

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