RESOURCES & ENERGY GROUP LIMITED — Interim / Quarterly Report 2012

Oct 28, 2012

26 October 2012

Company Announcements Office ASX Limited

ACTIVITIES REPORT FOR THE QUARTER ENDED 30 SEPTEMBER 2012

Deep Energy Limited (DEL) (which is 51.85% owned by Resource & Energy Group Limited ("the Company") holds 12 Geothermal Exploration Licences (GELs) in the South Australian Heat Flow Anomaly – an area prospective for geothermal energy. The GELs cover an area of approximately 6000 square kilometres.

DEL is in the process of completing non-compliance and variation to work programs and renewals of the existing GELs. Discussions are being held with Primary Industry and Resources South Australia to consolidate the existing 12 GELs into two new GELs of 3000 square kilometres each.

Discussions continue with potential joint venture partners and financial institutions.

Expenditure Exploration and evaluation costs incurred for the quarter were $15,950.

Richard Poole Chairman Resources & Energy Group Limited

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

Resources & Energy Group Limited

12 110 005 822 30 Sept 2012

ABN Quarter ended ("current quarter")

Consolidated statement of cash flows

Cash flows related to operating activities		Current quarter$A'000	Year to date(3 months)
				$A'000
1.1	Receipts from product sales and related debtors		-	-
1.2	Payments for	(a) exploration and evaluation	(16)	(16)
	(b) development(c) production		--	--
		(d) administration	(125)	(125)
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		-	-
			(141)	(141)
	Net Operating Cash Flows
	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 (Cash acquired from purchase of subsidiary)		-	-
	Net investing cash flows		-	-
1.13	forward)	Total operating and investing cash flows (carried	(141)	(141)

Rule 5.3

1.13	Total operatingand investing cash flows (broughtforward)	(141)	(141)
	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 (cost of raising funds)	-	-
	Net financing cash flows	-	-
	Net increase (decrease) in cash held	(141)	(141)
1.20	Cash at beginning of quarter/year to date	1,260	1,260
1.21	Exchange rate adjustments to item 1.20	-	-
1.22	Cash at end of quarter	1,119	1,119

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	39
1.24	Aggregate amount of loans to the parties included in item 1.10	-

1.25 Explanation necessary for an understanding of the transactions

Payments totaling $14,850 were made to Arthur Phillip Pty Ltd, an associated entity of Mr R Poole. The disbursements were in relation to company secretarial fee, rent, the preparation of the annual financial report and ASX reporting requirements.

• Payments totalling $13,200 were paid to Mr R Poole, for director fees owing.
• Payments totaling $2,750 were paid to Entertainment Marketing Enterprise Pty Ltd, an associated entity of Mr P Suriano. The disbursements were in relation to director fees.
• Payments totaling $8,250 were paid to Reality Energy Attitude Life Pty Ltd, an associated entity of Ms V Bruce. The disbursements were in relation to director fees.

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

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	-	-
3.2	Credit standby arrangements	-	-

Estimated cash outflows for next quarter

		$A'000
4.1	Exploration and evaluation	100
4.2	Development	-
4.3	Production	-
4.4	Administration	50
	Total	150

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	1,119	1,260
5.2	Deposits at call
5.3	Bank overdraft
5.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	1,119	1,260

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

6.2 Interests in mining tenements acquired or increased

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	Numberquoted	Issue price persecurity(see	Amount paid up persecurity (see note 3)
				note 3) (cents)	(cents)
7.1	Preference
	+securities
	(description)
7.2	Changes during
	quarter(a) Increases
	through issues
	(b) Decreases
	through returns of
	capital, buy-backs,
	redemptions
7.3	+Ordinary securities	44,842,306	44,842,306
7.4	Changes during
	quarter
	(a) Increasesthrough issues
	(b) Decreases
	through returns of
	capital, buy-backs
7.5	+Convertible debt
	securities
	(description)
7.6	Changes during
	quarter
	(a) Increases
	through issues
	(b) Decreases
	through securitiesmatured, converted
7.7	Options (description
	and conversion
	factor)
7.8
	Issued during
	quarter
7.9	Exercised during
	quarter
7.10	Expired during			Exercise price	Expiry date
	quarter

7.11	Debentures
	(totals only)
7.12	Unsecured notes(totals only)

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.

(Director)

Sign here: Date: 26 October, 2012

Print name: Richard Poole

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.

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