RIEDEL RESOURCES LIMITED — Interim / Quarterly Report 2014

Oct 29, 2014

30 October 2014

Quarterly Activities Report for the Period Ended 30 September 2014

Riedel Resources Limited (ASX: RIE, "Riedel" or "the Company") is pleased to present its 2014 September Quarter Activities Report:

HIGHLIGHTS

Marymia Project

Australian Mines Limited ("Australian Mines") Earning Up to 80%

• In October, Australian Mines advised that they have elected to continue with the Stage 1 earn-in pursuant to the farm-in and joint venture agreement and will pay $250,000 to Riedel on or before 12 November in order to proceed to the next stage.
• Moving Loop Electromagnetic Survey (MLEM) delineates potential Kambalda-style nickel sulphide conductor in ultramafic host rock ("Simmons" prospect).
• Two diamond drill holes (1,230 metres) at the Simmons target each intersected distinct sulphide zones (>10% sulphides) in ultramafic rocks similar in nature to those which host the rich Kambalda-type nickel deposits.
• Follow-up MLEM survey commenced in October over the Simmons prospect and nearby areas in search of additional bedrock conductors.

Charteris Creek JV

FMG Resources Pty Ltd ("FMGR") Earning Up to 80%

Cash at 30 September 2014 - $0.246M.

Mineralised rock chips samples including 8.41% Cu/1.22g/t Au and 7.9% Cu/0.41g/t Au associated with porphyry-style coppermolybdenum mineralisation and related base-metal-bearing quartz veins at the Lightning Ridge prospect.

Corporate

• $0.298M raised from a successful partially underwritten Share Purchase Plan.

COMPANY DIRECTORS Mr Ian Tchacos Non-Executive Chairman

Mr Jeffrey Moore Managing Director

Mr Ed Turner Technical Director

Mr Andrew Childs Non-Executive Director

COMPANY SECRETARY Ms Sue Symmons

CONTACT DETAILS Principal & Registered Office Suite 1 45 Ord Street West Perth Western Australia 6005

Postal Address PO Box 1559 West Perth Western Australia 6872

Website www.riedelresources.com.au

Email admin@riedelresources.com.au

Phone +61 8 9226 0866

Facsimile +61 8 9486 7375

ABN: 91 143 042 022 ASX CODE: RIE

Riedel's assets include a portfolio of gold, copper and nickel projects and significant land holdings in prospective Archaean- and Proterozoic-age terranes of Western Australia (see Figure 1 for location of projects).

The Company has a mixture of advanced and early stage prospects, including:

• Marymia Australian Mines earning up to 80% (copper, gold, nickel and base metals);
• Charteris Creek FMGR earning up to 80% (copper, molybdenum, gold and iron-ore);
• Cheritons Find (gold - 1 Inferred Resources of 1.4Mt @ 2.4g/t Au for 108,000 oz);
• Millrose (gold - 2 Inferred Resources of 4.0Mt @ 2.4g/t Au for 309,000 oz).

Furthermore, the Western Australian Projects are augmented with a number of additional prospects, including existing joint ventures, royalty agreements and free carried interests.

Figure 1: Western Australia Project locations

1 Sons of Gwalia – 29 November 2000. This information was previously prepared and disclosed on the basis of compliance with the JORC Code – 2004 Edition. The Inferred Mineral Resources have not been subsequently updated to satisfy compliance with the JORC Code - 2012 Edition as the information has not materially changed since it was last reported.

2 Phil Jones (Al Maynard & Assoc) – 2010. This information was previously prepared and disclosed on the basis of compliance with the JORC Code – 2004 Edition. The Inferred Mineral Resources have not been subsequently updated to satisfy compliance with the JORC Code - 2012 Edition as the information has not materially changed since it was last reported.

MARYMIA PROJECT JOINT VENTURE

Australian Mines earning interests up to 80%

On 30 April 2014 Riedel announced the key terms and conditions of a farm-in and joint venture arrangement over exploration licences 52/2394 and 52/2395 ("the Marymia Project") with Australian Mines Limited (ASX: AUZ, "Australian Mines"). A Heads of Agreement was signed by the parties and if the farm-in and joint venture arrangement proceeds to its full conclusion, the earn-in will be worth up to $3.3M.

Key Terms of Heads of Agreement

• $50,000 paid to Riedel upon signing the Heads of Agreement;
• Australian Mines has the right to withdraw from the arrangement subject to spending a minimum of $150,000 in exploration on the Marymia Project within six months from commencement ("Minimum Expenditure") (completed);
• If Australian Mines exercises its option to continue with the farm-in arrangement after satisfying the Minimum Expenditure, Australian Mines must make a cash payment to Riedel of $250,000 (notification received from Australian Mines that payment will be made on or before 12 November 2014);
• By spending $1,000,000 (including the Minimum Expenditure) on exploration within an initial two year period from commencement Australian Mines can earn a 51% interest in the Marymia Project ("Stage 1 Earn-in");
• By spending a further $2,000,000 on exploration within a further 3 year period following the Stage 1 Earn-in, Australian Mines can earn an additional 29% interest (taking the total interest to 80%) in the Marymia Project ("Stage 2 Earn-in");
• If all milestones are met by Australian Mines within the Stage 1 and Stage 2 Earn-in periods, Australian Mines will have earned an interest of 80% in the Marymia Project by the expenditure of $3,000,000 on exploration within the Joint Venture Area and by cash payments of $300,000 to Riedel;
• Once Australian Mines has satisfied either its Stage 1 or Stage 1 plus Stage 2 Earn-in obligations and notified Riedel of its election to form a joint venture, with a resulting joint venture interest of either 51% or 80%, Riedel may elect to contribute on a pro-rata basis or dilute its interest according to standard dilution formulae;
• If a Joint Venturer's Joint Venture interest reduces to 10% or less, the interest is converted to a 2% Net Smelter Royalty;
• Australian Mines will be the operator and manager of the Project.

Marymia Project tenement location and geology

Riedel holds two exploration licences (E52/2394 and E52/2395) which collectively form the Marymia Project and cover an area of more than 425 square kilometres in the highly prospective Doolgunna-Thaduna region of the Proterozoic volcano-sedimentary Bryah and Yerrida Basins and Archaean Baumgarten Greenstone Belt in the Marymia Inlier.

The Marymia Project is located approximately 30 kilometres east of the 4.7M oz Plutonic gold mine, 55 kilometres north-east of Sandfire Resources NL's DeGrussa copper-gold mine (550,000 tonnes contained copper metal), and 12 kilometres east-north-east of Ventnor Resources Limited's Green Dragon and Thaduna copper deposits (100,000 tonnes contained copper metal) in Western Australia's Mid-West region (see Figure 2).

Significant regional structures identified in the project area include the Jenkin Fault and prospective, mineralised geology including the Archaean-aged Baumgarten Greenstone Belt and Proterozoic-aged sediments belonging to the Yerrida and Earaheedy Groups. The project is prospective for copper, gold and nickel mineralisation and Riedel has delineated numerous high priority targets for each of these commodities.

Figure 2: Marymia Project - Location Map

Activities for the Quarterly period ended 30 September 2014

Australian Mines refined its exploration activities to focus on the emerging Simmons prospect in response to a ground-based EM survey which identified a strongly conductive body beneath an historic nickel-in-soil anomaly. As a result, two diamond drill holes were completed at Simmons and the Company has since commenced a follow-up EM survey across a broader area to investigate additional priority targets prospective for nickel sulphide mineralisation.

In August 2014, a ground-based EM survey detected a strongly conductive body beneath a historic nickel-in-soil anomaly3 . This geophysical anomaly, named the Simmons prospect, became the focus of exploration activities with Australian Mines systematically working to identify potential nickel sulphide mineralisation.

Modelling of the Simmons prospect by Southern Geoscience Consultants indicated that the source of the anomaly is a 400 metre long body, which appears to parallel a previously reported 1,200 x 600 metre nickel and copper soil anomaly. The top of the conductive body is estimated to be approximately 250 metres below surface and continues to a depth of at least 700 metres.

Southern Geoscience concluded that the Simmons prospect is a high priority target prospective for massive sulphide mineralisation that could be related to nickel (-copper) or possibly DeGrussa-style VMS copper-gold mineralisation.

The identification of a strong late-time conductor within a proven geological setting was the catalyst for Australian Mines to devise a strategic diamond core drilling programme to test the source of this bedrock conductor.

In late September, Australian Mines reported that it had completed an initial two diamond drill holes for a total of 1,230 metres at the Simmons prospect4 . Encouragingly, drilling intersected ultramafic rocks similar in nature to those which host the rich Kambalda-type nickel deposits (see Table 1 for drill hole details).

Australian Mines and Riedel are both very encouraged by these initial results from the maiden drilling programme at Simmons. Two distinct sulphide zones (>10% sulphides), (see Figure 3) were observed in drill core from both holes, with both zones appearing to contain iron sulphides with trace amounts of other sulphides including chalcopyrite (copper sulphide) in hole number SMDD001.

3 Australian Mines Limited - ASX release 1 August 2014.

4 Australian Mines Limited – ASX release 30 September 2014.

Table 1: Simmons Diamond Core Drill Programme

Hole ID	Depth(m)	North(MGA50)	East(MGA50)	RL(m)	Dip	Azimuth	Comments
SMDD001	600.7	7199080	801780	580	-60°	140°	No significant nickelintersections returned
							Observed sulphidespredominantly pyrrhotite & pyrite,and minor chalcopyrite
							3 metres @ 0.10% copper from578 metres
							Ultramafic intersected at 526.6metres down hole
SMDD002	630.8	7199076	801775	580	-60°	140°	No significant nickel intersectionsreturned
							Observed sulphidespredominantly pyrrhotite & pyrite
							1 metre @ 0.16% copper from516 metres
							3 metres @ 0.82% zinc from 516metres
							9 metres @ 827ppm nickel from560 metres
							Ultramafic intersected at 504.8metres down hole

All co-ordinates are recorded in MGA Zone 50.

Drill hole collar co-ordinates were obtained using handheld GPS and are accurate to within +/- 5 metres. Reduced Level (RL) is reported in metres above sea level.

Data entry and electronic storage of Australian Mines' assay data adheres to the industry's accepted protocols and is managed by rOREdata in Perth, Australia

Figure 3: A section (515.6 to 516.8 metres) of the four-metre wide sulphide zone intersected by drill hole SMDD002 at the Simmons prospect.

Although drilling intersected multiple sulphide zones, neither of the drill holes adequately explain the strong nickel and copper soil anomalies previously reported across the prospect area or the strong conductive EM anomaly.

The mineralogy of Kambalda-style nickel deposits is dominated by pyrrhotite, pentlandite (nickel sulphide) and pyrite, therefore the presence of sulphides at Simmons is considered significant. Subsequently, Australian Mines commenced down hole EM surveys to ascertain whether additional conductive zones (which may provide further evidence of a massive nickel sulphide zone) are present below or adjacent to the drill holes.

Figure 4: Marymia Project - Ground EM survey currently in progress on aeromagnetic background.

In October 2014, Australian Mines commenced a follow-up EM survey over priority nickel sulphide targets. The most recent EM survey has been specifically designed to identify further

Kambalda-type bedrock conductors within the northern continuation of the Simmons ultramafic (komatiite) sequence (see Figure 4), including:.

• MM001 a surface geochemical anomaly extending for 1,200 x 800 metres with a strong coherent nickel and copper response; and
• MM004 a surface geochemical anomaly covering 2,400 x 1,200 metres, developed on a sub-cropping ultramafic lithology.

CHARTERIS CREEK PROJECT JOINT VENTURE

FMG Resources Pty Ltd earning interests up to 80%

In January 2014, Riedel announced that FMG Resources Pty Ltd ("FMGR"), a wholly-owned subsidiary of Fortescue Metals Group Ltd, has entered into a Farm In and Joint Venture Agreement worth up to $1M over Exploration Licence 45/2763.

The Company's 100%-owned tenement is 131km2 in area and is located approximately 45km north of Nullagine and 50km south-east of Marble Bar in the Pilbara Region of Western Australia (see Figures 1 and 5 for project location).

Figure 5: Charteris Creek Project – Geological Map highlighting known mineral occurrences and deposits

Tenement Location and Geology

E45/2763 is located within the East Pilbara Granite Greenstone Terrain. Tectonically, it is encompassed by the Marble Bar and Kelly Greenstone Belts and Mount Edgar Granitoid Complex in the west and northwest and McPhee Dome and Hamersley Basin to the east and southeast.

The Charteris Creek Project focuses on Archaean intrusive rocks, which are intruding the greenstones overlying the McPhee Dome structure. These are described as Gobbos Granodiorite, a locally porphyritic biotite granodiorite and monzogranite. Various copper and copper-molybdenum occurrences are reported in association with these intrusive rocks. Indications for a porphyritic source of the minerals have been given in previous exploration reports (see Figure 5).

Activities for the period ended 30 September 2014

During the quarter, FMGR continued field work around the Lightning Ridge prospect. This included further detailed geological mapping and rock chip sampling as well as stream sediment and soil sampling. The rock chip sampling, including assays from samples taken in the previous quarter, produced some highly anomalous results with the best summarised in Table 2 below.

Sample ID	Cu (%)	Au (ppb)	Mo (ppm)	Pb (ppm)	Ni (ppm)	W (ppm)
D167533	8.41	1220	59.5	340	74	5.5
D167410	7.91	413	3	123	106	2
D167419	5.73	95	12.5	270	12	9.5
D167512	3.93	45	288	90	52	1.5
D167411	3.20	120	30	67	62	19
D167464	2.48	284	9.5	339	70	17.5
D167453	1.06	95	202	27	26	8.5
D167418	0.79	16	9	7	54	4
D167513	0.78	16	13	34	20	4.5
D167459	0.29	24	6.5	20	24	81

Table 2: Summary of most significant rock chip assays

In total 2 rock chip, 122 stream sediment and 271 soil samples were collected during the Quarter. Copper results from the stream sediment sampling are presented in Figure 6 (includes assays from sampling taken in the previous quarter) and copper results from the soil sampling are presented in Figure 7. Regional geological mapping was also completed over areas identified as anomalous by the stream sediment sampling.

Figure 6: FMGR stream sediment Cu results over mapped geology background

Figure 7: FMGR soil sampling Cu results over mapped geology background

The Archaean porphyry system at Lightning Ridge is currently poorly understood due to its age and differing geochemical characteristics when compared to much younger known analogues. Detailed information relating to alteration, structures, goethite/jarosite ratios, structural orientation and abundance of quartz veins is required to build a more comprehensive picture of the geological setting. In combination, these observations will enable FMGR to vector towards the potential mineralised centre of the porphyry system.

Mapping in the September Quarter focussed on the areas where encouraging mineralisation and alteration had been previously identified and subsequently confirmed to be the surface expression of a copper porphyry system (historic Lightning Ridge area). Detailed mapping was completed at 1:5,000 and 1:2,000 scale in areas of greater interest. In addition, further mapping around the prospect was completed at 1:5,000 and 1:10,000 scale. The regional scale mapping was undertaken to try to identify alteration that could indicate a broader porphyry system at depth.

During the mapping programme porphyry-style copper-molybdenum mineralisation and related base-metal-bearing quartz veins were noted to be spatially related to the granodioritic intrusions and are considered broadly contemporaneous in age (Barley, 1982; Bagas, 2005; Williams and Bagas, 2007). There appears to be simplified zoning to the metal prospects in the area, characterized by central Cu-Mo and peripheral Cu-Ag-Zn+Au assemblages. This type of metal zoning is common in porphyry copper districts elsewhere and is indicative of the cooling of hydrothermal fluids away from an intrusive heat-source. The majority of the mineral prospects in the area occur along granodiorite pluton margins.

Rock chip samples collected were dispatched for petrological geochemical analysis. The results from the petrology samples are still outstanding. Integration and further interpretation of the petrological results is a key step in increasing FMGR's understanding of the geological setting. It is hoped that this additional information will clarify the origin of some key lithological types identified in the project area.

To date the empirical data acquired indicates that there are structural and porphyritic elements interacting to control the distribution of anomalous copper seen within the project area. The observed alteration systems around what has historically been believed to be the core of the copper porphyry system show typical alteration assemblages, however they are less prominent than those seen in younger known analogues.

Hydrothermal alteration at Lightning Ridge is characterised by mafic mineral-destructive quartzclay-mica-pyrite (phyllic) alteration. The sites of the magmatic mafic minerals (e.g., biotite, hornblende and pyroxene) have been obscured and the feldspars replaced primarily by sericite. This type of phyllic alteration is common in the late-stage overprinting of porphyry copper systems. Relict potassic alteration was not observed in outcrop during the field review. External to the phyllic zones, chlorite clearly replaces mafic minerals.

One of the concepts being investigated is that the majority of the porphyry intrusion is possibly concealed beneath younger, sedimentary and volcanic rocks. If this is the case then the alteration seen in the field observations may only be the peripheral alteration halo to a much broader concealed system.

Stream and soil geochemical results appear to be largely consistent with the metal zoning that characterises other global porphyry systems such as Yerington (Nevada), Batu Hijau

(Indonesia) and Butte (Montana). Figures 6 and 7 illustrate the coherent nature of the copper anomalies in the stream and soil sampling. When examining distribution patterns it is possible to see that the higher anomalous copper values in particular are focussed at the edges of the intrusive body.

OTHER PROJECTS

Riedel continues to investigate options to commercialise the Millrose and Cheritons Find Gold Projects, including project development by way of toll treatment and/or other treatment opportunities or by project divestment.

CORPORATE

The Company held Cash Reserves at 30 September 2014 of $0.246M.

TENEMENT SCHEDULE

Following is the schedule of Riedel Resources minerals tenements as at 30 September 2014.

Area of Interest	Tenementreference	Nature of interest	Interest
Charteris Creek	E45/2763	Direct	100%
Bronzewing South	E36/623	Indirect	80%
Bronzewing South	M36/670	Indirect	80%
Delaney Well	E36/734	Direct	100%
West Yandal	M36/615	Royalty	0%
Marymia	E52/2394	Direct	100%
Marymia	E52/2395	Direct	100%
Millrose	E53/1304	Direct	100%
Millrose	E53/1305	Direct	100%
Porphyry	M31/157	Royalty	0%
Dulcie	P77/3727	Direct	20%
Dulcie	P77/3728	Direct	20%
Dulcie	P77/3729	Direct	20%
Cheritons Find	E77/1793	Direct	100%

For further information please contact: Ed Turner Jeffrey Moore Executive Director Executive Director Riedel Resources Limited Riedel Resources Limited Tel: +61 8 9226 0866 Tel: +61 8 9226 0866 Email: ed.turner@riedelresources.com.au Email: j.moore@riedelresources.com.au

About Riedel Resources Limited

Riedel Resources Limited listed on ASX on 31 January 2011 and is an Australian-based exploration company established to explore for and develop mineral deposits.

Further information can be found at the Company's website www.riedelresources.com.au

Appendix 1: JORC Code, 2012 Edition

Section 1: Sampling Techniques and Data

information.

Criteria	JORC Code explanation	Commentary
Samplingtechniques	Nature and quality of sampling (e.g. cutchannels,randomchips,orspecificspecialised industry standard measurementtools appropriate to the minerals underinvestigation, such as down hole gammasondes, or handheld XRF instruments, etc.).These examples should not be taken aslimiting the broad meaning of sampling.Include reference to measures taken toensuresamplerepresentivityandtheappropriate calibration of any measurementtools or systems usedAspectsofthedeterminationofmineralisation that are Material to the PublicReport.	Marymia ProjectNo assay results or significant intersections areincluded in the accompanying report.The HQ diamond core was half-cut and sampledat one metre intervals.Sampling is guided by AUZ protocols and QAQCprocedures which were designed in consultationwith SRK Consulting, Perth.All samples were submitted to the Bureau Veritas(UltraTrace) assay laboratory in Perth for FireAssay and Four Acid ICP-OES analysis.AUZ analyse for the following elements: Au, Ag,Al, As, Ba, Bi, Ca, Cd, Ce, Co, Cr, Cu, Fe, K, La,Li, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sn, Sr,
	In cases where 'industry standard' work hasbeen done this would be relatively simple(e.g. 'reverse circulation drilling was used toobtain 1 m samples from which 3 kg waspulverised to produce a 30 g charge for fireassay'). In other cases more explanationmay be required, such as where there iscoarse gold that has inherent samplingproblems.Unusualcommoditiesormineralisationtypes(e.g.submarinenodules) may warrant disclosure of detailed	Te, Ti, Tl, V, W, Zn.Charteris Creek ProjectStream sampling was undertaken as part ofreconnaissancemappingandprospectingprogram. The regional sampling program wasdesigned to target the secondary drainage andcreeks. Samples were obtained from low energylocations within the drainage. Material waspassed through a 210um mesh sieve in order torecover 200g samples of the fine fraction materialfor analysis.

Soil samples were taken as part of a reconnaissance mapping and prospecting program. Sampled material was obtained for the B horizon typically 20-30 centimetres below the surface. Material was passed through a 210um mesh sieve to recover 200g samples of the fine fraction material for analysis. Samples were taken at 100x50 meter spacing over the main target area. Additional sampling over a secondary target area was completed at 100x100m spacing.

Rock chip samples were obtained as part of reconnaissance mapping and prospecting program. These samples were collected form the surface by hand and ranged in size from 0.5-1

kilogram, sample were subsequently crushed and pulverized for analysis.

All samples were sent to Bureau Veritas for sample preparation and assay.

Drilling techniques

Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.)

Marymia Project

The Simmons drill program referred to in the accompanying report involved two diamond core drill holes.

Drill hole SMDD001 had an RC pre-collar to 96 metres down hole, with an HQ diamond tail to end of hole (being 600.7 metres).

Drill hole SMDD002 had a rock roller pre-collar to 36 metres down hole, with an HQ diamond tail to end of hole (being 630.8 metres).

The core was oriented and marked by the drill contractor (DDH1 drilling) using ACT Mk II electric core orientation.

Charteris Creek Project

No drilling undertaken.

Drill sample recovery

• Method of recording and assessing core and chip sample recoveries and results assessed.
  • Measures taken to maximise sample recovery and ensure representative nature of the samples.
  • Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Marymia Project

Diamond core recoveries are recorded during drilling and reconciled during the core processing and geological logging. No significant sample recovery problems appear to have occurred in either drill hole.

Insufficient drilling and geochemical data is available at present to evaluate potential sample bias. AUZ protocols, however, are followed to preclude any issues of sample bias due to material loss or gain.

Charteris Creek Project

No drilling undertaken.

• Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.
  • Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.

Marymia Project

Geological logging of drill core have been recorded for this drill hole, including lithology, mineralogy, texture, weathering, oxidation, colour and other features of the samples.

Drill core was not logged to any geotechnical standard and the data is insufficient to support Mineral Resource estimation at this stage.

The drill hole was logged in full to the end of the

The total length and percentage of the relevant intersections logged. hole.

Charteris Creek Project

No drilling undertaken.

Subsampling techniques and sample preparation

• If core, whether cut or sawn and whether quarter, half or all core taken.
• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.
  • For all sample types, the nature, quality and appropriateness of the sample preparation technique.
  • Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.
  • Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.
  • Whether sample sizes are appropriate to the grain size of the material being sampled.

Marymia Project

No AUZ assay results or significant intersections are included in the accompanying report.

The diamond core resulting from the Company's Simmons drill program was cut using an Almonte Diamond saw by Australian Mines personnel.

Half core was sampled on one-metre intervals.

Samples are dried and pulverised using industry standard methods by Bureau Veritas (UltraTrace) at their Perth assay laboratory.

All samples are pulverised to produce a 50-gram charge, which is analysed by Fire Assay and Four Acid ICP-OES.

The sample sizes are considered to be appropriate to correctly represent the sought after mineralisation style.

Charteris Creek Project

The samples have been sorted & dried. The whole samples have been pulverized in a vibrating disc pulveriser.

Standard QAQC procedures adhered to during the acquisition of Stream and Soil samples.

Field duplicates were acquired at a frequency of 1 in every 20 sample taken.

Standards were acquired at a frequency of 1 in every 33 sample taken.

Internal laboratory QAQC was completed to the required standard

Only internal laboratory QAQC was completed on the rock chip samples submitted.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and

Marymia Project

No AUZ assay results or significant intersections are included in the accompanying report.

Samples were submitted to Bureau Veritas (UltraTrace) in Perth and will be assayed using a Fire Assay and mixed four acid digest.

The samples are digested are refluxed with a

model, reading times, calibrations factors applied and their derivation, etc.

Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

mixture of acids including Hydrofluoric, Nitric, Hydrochloric and Perchloric acids and conducted for multi-elements including Au, Ag, Al, As, Ba, Bi, Ca, Cd, Ce, Co, Cr, Cu, Fe, K, La, Li, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sn, Sr, Te, Ti, Tl, V, W, Zn.

This method approaches a total digest for many elements although some refractory minerals may not be completely attacked.

The quality of the analytical results is monitored through the use of internal laboratory procedures to ensure the results are representative and within acceptable ranges of accuracy and precision.

Charteris Creek Project

The samples have been sorted & dried. The whole samples have been pulverized in a vibrating disc pulveriser.

Gold analysis was completed using an Aqua Regia digest. Results were determined by Inductively Coupled Plasma (ICP) Mass Spectrometry.

Multi Element analysis was completed using a digest and reflux with a mixture of acids including Hydrofluoric, Nitric, Hydrochloric and Perchloric Acids. Results were determined by Inductively Coupled Plasma (ICP) Optical Emission Spectrometry.

Internal laboratory QAQC includes repeat assaying of at least 1 in 20 samples in the batch.

Internal laboratory QAQC includes repeat assays for verification of significant gold results.

Internal laboratory QAQC includes inclusion of standards and blanks to test equipment for accuracy and efficiency.

Verification of sampling and assaying

• The verification of significant intersections by either independent or alternative company personnel.
• The use of twinned holes.
• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Marymia Project

No AUZ assay results or significant intersections are included in the accompanying report.

Primary data was collected using a set of standard Excel templates using lookup tables. The information was sent to the Company's external database consultant, rOREdata, for validation and compilation into Australian Mines' database.

Discuss any adjustment to assay data. No twinned hole drilling is proposed by Australian Mines at this stage.

No adjustments or calibrations were made to any assay values.

Charteris Creek Project

All assay data is internally verified upon receipt from the laboratory and subsequently stored in an Acquire database.

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

• Specification of the grid system used.
• Quality and adequacy of topographic control.

Marymia Project

Drill hole collar locations were recorded using handheld Garmin GPS.

The expected accuracy is +/- 5 metres for easting and northings and 10 metres for elevation coordinates. Elevation values were in AHD.

The grid system used is Map Grid of Australia (MGA) GDA94 Zone 50.

Charteris Creek Project

All sample points were located using a hand held GPS.

Data captured in GDA 94, Zone 51.

Data spacing and distribution

Data spacing for reporting of Exploration Results.

• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.
• Whether sample compositing has been applied.

Marymia Project

AUZ's maiden drill program at the Simmons prospect (Marymia Project) involved two diamond core drill holes targeting a geophysical anomaly interpreted for the Company's recently completed moving loop electromagnetic survey.

This drill data is not being used for estimating a Mineral Resource or modelling of grade at this stage in exploration.

No sample composting was applied to the exploration results.

Charteris Creek Project

Soil grid used over the main prospect was100x50m, 100x100m was used for the secondary target.

Stream sampling was designed to test catchment areas roughly 1km2 in size, reducing dilution of any metals present.

Orientationofdatainrelationtogeologicalstructure		Whethertheorientationofsamplingachieves unbiased sampling of possiblestructures and the extent to which this isknown, considering the deposit type.If the relationship between the drillingorientation and the orientation of keymineralised structures is considered to haveintroduced a sampling bias, this should beassessed and reported if material.	Marymia ProjectThe diamond core holes are drilled towards 140degrees at an angle of -60 degrees to intersect amodelledmineralisedzoneatanearperpendicular orientation. The orientation of thebody however may be locally variable and anyrelationship to mineralisation has yet to beidentified.
			Charteris Creek Project
			The regional stream sediment sampling programwas used as a reconnaissance tool. Sampling thetributaries generated data which highlightedareas with elevated metal anomalism thatrequired further investigation.
			Soil sample grids have been designed in an eastwest direction to test targets which includingpossiblestructuresthatappeartobepredominatelyorientatedinanorth-southdirection.
		The measures taken to ensure sample	Marymia Project
Sample
		security.
security			The chain of custody is managed by AUZ.Samples are stored on site and are delivered byAUZ personnel directly to the assay laboratory.
		The results of any audits or reviews of	Marymia Project
Auditsorreviews		sampling techniques and data.	AUZ sampling techniques and data collectionprocesses are of industry standard and havebeen subjected to internal reviews.
			Any data received from the assay laboratories areindependently verified by rOREdata in Perth,Australia.
			Charteris Creek Project

Section 2: Reporting of Exploration Results

Criteria	JORC Code explanation	Commentary
Mineraltenementandlandtenurestatus	Type, reference name/number, location andownership including agreements or materialissues with third parties such as jointventures, partnerships, overriding royalties,nativetitleinterests,historicalsites,wildernessornationalparkandenvironmental settings.The security of the tenure held at the time ofreportingalongwithanyknownimpediments to obtaining a licence tooperate in the area.	Marymia ProjectThe Marymia Project (and Simmons prospect) islocated within the Western Australian explorationlicences of E52/2394 and E52/2395.On 30 April 2014, Australian Mines announced ithad signed a Heads of Agreement with RiedelResources Limited (ASX code: RIE) in relation tothe Marymia Project.Exploration licences E52/2394 and E52/2395 arewithin the Marymia and Ned's Creek Pastoral
		Leases and contained within the Native Title

Exploration activities on E52/2394 and E52/2395 are permitted under agreements dated; 7 October 2010 between Audax Resources Ltd (a subsidiary of Riedel Resources) and the Yamatji Marlpa Aboriginal Corporation as agent for the Yugunga-Nya people; and

Claim boundaries of the Gingirana (WAD6002/03) and Yugunga-Nya (WAD6132/98)

Traditional Owners.

23 October 2010 between Audax Resources and Gingirana Pty Ltd. Australian Mines is permitted to operate under these agreements as the company is joint venturing with Riedel Resources on this project.

Exploration licences E52/2394 and E52/2395 are in good standing with no impediments to exploration known to exist at the time of writing.

Charteris Creek Project

Exploration activities were all undertaken on EL 45/2763, which comprises the Charteris Creek Project. The Licence is held by Riedel Resources Ltd ('Reidel') and registered in the name of Audax Minerals Pty Ltd.

The Licence was granted on 8 November 2011 and is due to expire on 8 November 2016.

On 16 January 2014 FMG Resources Pty Ltd entered into a Farm In and Joint Venture Agreement with Reidel to earn an 80% interest in the tenement over a six year period.

The Licence is in good standing. The minimum expenditure commitment has been exceeded in

the first and second terms and will be met in the third year of term.

Explorationdonebyotherparties		Acknowledgmentandappraisalofexploration by other parties.	Marymia ProjectLimited exploration and drilling programs havepreviously been undertaken across the MarymiaProject by other companies.A summary of the historic anomalous gold andnickel intersections are outlined in the Prospectusreleased by Riedel Resources Limited on 23November 2010.
			Charteris Creek Project
			Exploration around the Gobbos Granodioriteintrusion started in the mid-1960s. Five mainproject areas were identified, namely the Bridget,Gobbos,LightningRidge,OtwaysandWallabirdeeRidgeprospectsbypreviousexplorers.
Geology		Deposit type, geological setting and style ofmineralisation.	Marymia ProjectAUZ are targeting three types of mineral depositsat Marymia;(i)DeGrussa-stylevolcanogenicmassive sulphide copper-gold,(ii)Kambalda-stylekomatiite-hostednickel sulphide, and(iii)Plutonic-style Archaean gold.The Marymia Project overlies the Baumgarten

Greenstone Belt, which is the interpreted northern extension of the Eastern Goldfields Province of the Yilgarn Craton. The geology of the Marymia Project comprises an Archaean greenstone sequence of basalts and komatiitic ultramafic rocks.

Charteris Creek Project

Copper porphyry target. Porphyry systems within or marginal to the intrusions. Granodiorite and tonalite intrusives rocks of Archean age are situated within the McPhee Dome and have intruded volcanic and sedimentary rocks of the also Archean Yilgalong (or: McPhee) Greenstone Belt.

Copper-molybdenum-silver-zinc-gold

mineralization proximal and distal to porphyry systems has been reported.

DrillholeInformation		A summary of all information material to theunderstanding of the exploration resultsincluding a tabulation of the followinginformation for all Material drill holes:oeasting and northing of the drill holecollaroelevation or RL (Reduced Level –elevation above sea level in metres) ofthe drill hole collarodip and azimuth of the holeodown hole length and interception depthohole length.If the exclusion of this information is justifiedon the basis that the information is notMaterial and this exclusion does not detractfrom the understanding of the report, theCompetent Person should clearly explainwhy this is the case.	Marymia ProjectRefer to Table 1 of the accompanying report.Charteris Creek ProjectNo drilling undertaken.
Dataaggregationmethods		In reporting Exploration Results, weightingaveraging techniques, maximum and/orminimum grade truncations (e.g. cutting ofhigh grades) and cut-off grades are usuallyMaterial and should be stated.Where aggregate intercepts incorporateshort lengths of high grade results andlonger lengths of low grade results, theprocedure used for such aggregation shouldbe stated and some typical examples ofsuch aggregations should be shown indetail.The assumptions used for any reporting ofmetal equivalent values should be clearlystated.	Marymia ProjectNo AUZ assay results or significant intersectionsare included in the accompanying report.No metal equivalents have been used in theaccompanying report.Charteris Creek ProjectNo drilling undertaken.
Relationshipbetweenmineralisationwidthsandinterceptlengths		Theserelationshipsareparticularlyimportant in the reporting of ExplorationResults.If the geometry of the mineralisation withrespect to the drill hole angle is known, itsnature should be reported.If it is not known and only the down holelengths are reported, there should be a clearstatement to this effect (e.g. 'down holelength, true width not known').	Marymia ProjectThere is insufficient understanding of the bedrockgeology at present to determine the truethickness of any reported drill intersections.Any intersections included in the accompanyingreport are down hole lengths. The true widths ofthese intersections are not known.Charteris Creek ProjectNo drilling undertaken.

Diagrams	Appropriatemapsandsections(with
	scales) and tabulations of intercepts should
	be included for any significant discovery
	being reported These should include, but
	not be limited to a plan view of drill hole
	collar locations and appropriate sectional
	views.

Marymia Project

Appropriate maps and sections are included in the body of the accompanying report.

Charteris Creek Project

The images in this report show the geology of the general region and more detailed Fortescue mapped geology in the main project area.

Additional images depict those copper and gold values that are considered to be anomalous in the stream and soil sediment sampling completed by Fortescue.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

Marymia Project

The accompanying document is considered to represent a balanced report.

Charteris Creek Project

Geological mapping and geochemical sampling have been the primary exploration tools used to date.

Maps displaying copper and gold were chosen for inclusion in this report as at this early stage their distributions are the easiest to recognise.

Interpretation of the acquired data is preliminary and by no means comprehensive.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

Marymia Project

AUZ released the results of its ground-based moving loop electromagnetic (MLTEM) survey on 1 August 2014. This MLTEM survey identified a strong bedrock conductor at the Company's Simmons prospect. This EM conductor formed the basis of the drilling program referred to in the accompanying report. The specifications, description and analysis of the MLTEM survey are included in Australian Mines' 1 August 2014 announcement.

AUZ released an announcement on 30 September 2014, which provided preliminary geological observations of the diamond core of holes SMDD001 and SMDD002. These observations include that two distinct sulphide zones (>10% sulphides) were noted in both drill holes. These sulphide zones appear to comprise iron sulphides (pyrrhotite and, to a lesser extent pyrite) with trace amounts of other sulphides

including chalcopyrite (copper) in hole number SMDD001.

Further data collection will be reviewed and reported when considered material.

Charteris Creek Project

Table 2 has been included to highlight some of the more encouraging assays results obtained from follow up mapping within the project area to date. These results should not be considered indicative of the overall prospectivity of the project as a whole.

Further work

• The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).
• Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Marymia Project

Further work will include drill testing of any resulting EM anomalies. The Company may also seek to undertake down hole electromagnetic survey of these drill holes to test for the presences of any off-hole conductors.

Charteris Creek Project

Finalising the interpretation of data gathered to date which will lead to a more robust mineralisation model for the project area.

Competent Person's Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Ed Turner, who is a Member of The Australian Institute of Geoscientists. Mr Turner is a full time employee of Riedel Resources Limited. Mr Turner has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Turner consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.