ZEOTECH LIMITED — Interim / Quarterly Report 2011

Jan 26, 2011

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Quarterly Report

For the three months ending December 2010

January 2011

Laconia Resources Limited

ASX Code: LCR ABN: 29 137 984 297 Level 1, 41-43 Ord Street West Perth WA 6005

PO Box 1151, West Perth WA 6872

Tel: 08 9486 1599 Fax: 08 9486 7899 Email: info@laconia.com.au

Summary & Highlights for the Quarter Barramine Project

• Detailed geochemical survey confirms potential for project to host significant base metal and gold mineralisation. o Potential mineralisation styles include; Mississippi Valley Type (MVT) base metal mineralisation, Volcanic associated (VHMS) base metals mineralisation, and epithermal gold-silver mineralization.

• Drill targets to be identified for planned drilling program to commence by end of Q1, 2011.

• Extension of geochemical sampling grid completed.

www.laconia.com.au

Capital Structure

70.22 million shares 23.7 million unlisted options

Board Members

Michael Sharwood Chairman

Ian Stuart Managing Director

Matthew Howison Non-Executive Director

Graeme Smith Company Secretary

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Mooletar Project

• Exploration Target of 216-264Mt @ 30-35% Fe confirmed.

• Exploration Target confirmed as a result of two drill programs and geological mapping of the project, and helps confirm the strong iron exploration potential of the project.

• Two high grade Banded Iron Formation (BIF) units identified over a 5km portion at the project.

• Study initiated incorporating results of the magnetite scoping study to identify processing, infrastructure and logistic options for project development.

701 Mile

• Follow up of Anomalous Rare Earth minerals.

Corporate

• Cash at bank at quarter end was $3.1 million.

Exploration Planned for March Quarter

Kookynie Project

• A 16 drill hole Reverse Circulation drilling program targeting high grade gold commencing early February.

Barramine Project

• Integration of all data generated to date and further refinement of drill targets.

701 Mile

• Regional auger traverse at 1 km intervals are planned to cover a northeast trending structural corridor. More detailed auger traverses at 100 to 200 m intervals are planned to assess areas known to contain anomalous REE rock chip values.

Laconia Resources – December 2010 Quarterly Report

Exploration Activities

Barramine Project – Gold and Base Metals, East Pilbara WA

(100% Laconia – excluding manganese and iron)

E45/3312, E45/3233, E45/3234

In November the Company announced that the results of a phase 1 geochemical survey (completed in September) at the Barramine Gold and Base Metal project had confirmed the potential for the project to host significant base metal and gold mineralisation.

The survey was designed to follow up previously defined airborne geophysical anomalies (EM anomalies) at the project area. The results have proved highly encouraging and have confirmed the potential for the project to host base metal and gold mineralisation.

The Barramine project is located in the East Pilbara region, 250km east of Port Hedland.

Follow up geochemical sampling

A follow up sampling program (Phase 2) was completed in December 2010. A total of 329 MAGSTREAM samples have now been collected from the Barramine area and analysed for a multielement suite by Actlabs Laboratories in Perth, after using an Aqua Regia digest. The sampling program has now covered a total area of 90 km[2] and has effectively assessed outcrop areas within the tenement.

Results from the phase 2 sampling program are being incorporated with results received to date and will help to further refine drill target generation, currently in progress.

Geochemical Survey Results Phase 1

MAGSTREAM data has confirmed the presence of anomalous Zn (>500 ppm, up to 1140 ppm) and Pb (>45 ppm, up to 194 ppm) values in the northwestern and southeastern portions of the overlying Carawine Limestone and associated Pinjina Chert (breccia). The base metal anomalies are supported by anomalous Ag, As, Mo, Hg, Ba and Sr values and may indicate the presence of MVTstyle mineralisation associated with the limestone units.

The underlying Jeerinah intermediate volcanics and volcaniclastics include volcanic agglomerates, indicating the presence of a volcanic centre with strong potential for associated base and precious metal mineralisation. The intermediate volcanics are associated with high background to anomalous Zn (>200 ppm, up to 1300 ppm), Cu (>100 ppm, up to 261 ppm), Au (>2.5 ppb) and As (> 20 ppm) values in the MAGSTREAM data.

MAGSTREAM Samples (magnetic fraction stream sediments)

Sample No	NW Cnr of Survey	SE Cnr of Survey	Au	Cu	Zn	Pb	Ag	As
200 samples	285422mE 7695224mN	291259mE 7684552mN	ppb	ppm	ppm	ppm	ppm	ppm
Max value			26	340	1300	194.3	3.19	94.4
Min Value			0.1	15.9	95.7	0.005	0.001	0.1
Average			1.85	102.1	359.5	25.4	0.06	24.8

Laconia Resources – December 2010 Quarterly Report

Grid MAGLAG and soil samples are still being evaluated over areas selected on the basis of anomalous geophysics. The northernmost grid (covering a 1200m x 1800m area) returned encouraging spot high Au values up to 267 ppb Au, occurring within two 1000 metre long, northnorthwesterly trending, anomalous (>2.5 ppb Au) zones along a structural contact. The anomalous Au trends are supported by anomalous Cu, Sb, Tl, Hg, Bi,Te and As values that are typically associated with epithermal-style gold and silver mineralisation. The grid was designed to cover a strong airborne EM anomaly that would appear to be supported by the anomalous geochemistry.

A small grid (3 traverses), 6km southwest of the main northern grid, was also targeted on an airborne EM anomaly, and returned anomalous MAGLAG Au values up to 44.5 ppb Au, supported by anomalous Cu (up to 189 ppm) and Zn (up to 706 ppm) values. The grid has been expanded to assess the full extent of these anomalous zones.

Northern MAGLAG Grid Samples (magnetic fraction lag or soil samples)

Sample No	NW Cnr of Grid	SE Cnr of Grid	Au	Cu	Zn	Pb	Ag	As	Sb	Te
295 samples	286500mE 7695300mN	287620mE 7693500mN	ppb	ppm	ppm	ppm	ppm	ppm	ppm	ppm
Max value			267	377	2800	116	0.698	246	25.7	2.74
Min Value			0.05	17.6	4.1	0.005	0.014	3.3	0.7	0.02
Average			4.3	79.5	247.3	15.8	0.062	32.4	6.5	0.51

Southwestern MAGLAG Grid Samples (magnetic fraction lag or soil samples)

Sample No	NW Cnr of Grid	SE Cnr of Grid	Au	Cu	Zn	Pb	Ag	As	Sb	Te
31 samples	284280mE 7688200mN	284640mE 7687800mN	ppb	ppm	ppm	ppm	ppm	ppm	ppm	ppm
Max value			44.5	166	706	22.3	0.196	70.7	12.4	0.78
Min Value			0.05	25.7	120	2.48	0.026	8.4	2.55	0.16
Average			4.0	85.3	340.8	9.8	0.065	28.3	6.1	0.4

In conclusion , the preliminary assessment of the MAGSTREAM and MAGLAG geochemical data from the Barramine Project has confirmed the presence of significant base and precious metal anomalies that warrant follow-up. The recognition of base metal anomalies within the Carawine Limestone has provided encouragement for exploring for replacement or MVT-style base metal mineralisation.

The underlying Jeerinah mafic to intermediate volcanic stratigraphy includes volcanic agglomerate units consistent with an ancient volcanic centre that can be associated with VHMS-style copperzinc-lead-gold-silver mineralisation. The geochemical data provides encouragement for this style of mineralisation with the presence of anomalous MAGSTREAM and fine fraction stream sediment samples in the area.

The Barramine Project’s geological position is along strike from known base metal deposits of Barramine, Camel Hump, Ragged Hills and Braeside. Previous exploration has discovered anomalous zinc and copper in highly altered pyritic acid volcanics in a prospective geological environment for base metal mineralisation.

Laconia Resources – December 2010 Quarterly Report

Further work

The MAGSTREAM geochemical survey over the Barramine Project area has highlighted base metal anomalies both within the Jeeninah Formation volcanics and the overlying limestone and chert breccia units of the Carawine Formation. The anomalies are generally supported by the pathfinder elements (Sb, As, Sn, Te and Hg) and clearly represent priority follow- up exploration targets. Follow-up will include implementation of grid soil/MAGLAG geochemical programs and geophysical IP surveying that should lead to RC drilling targets. These follow-up programs are scheduled to commence during the next quarter.

Barramine EM image and Zinc anomalism

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Laconia Resources – December 2010 Quarterly Report

Mooletar Project Magnetite Project, Mount Magnet WA

(100% Laconia)

M58/110, M58/266, M58/348, M58/349, P58/865, P58/1053, P58/1054, P58/1055, P58/1056, P58/1129, P58/1383, P58/1384, P58/1385, P58/1386, P58/1387, P58/1388, P58/1408, P58/1409, P58/1410, P58/1411, P58/1412, P58/1413, P58/1414, P58/1415, P58/1476, P58/1477, P58/1478, P58/1479, P58/1480, P58/1481, P58/1482, P58/1483, P58/1484, P58/1485

In November the Company confirmed a significant iron Exploration Target at the Mooletar Project near Mt Magnet in the Murchison region of Western Australia. The Exploration Target helped confirm the strong iron exploration potential of the project, and was confirmed as a result of two drill programs at the project carried out in 2010 and a mapping program completed over the project in October.

The Mooletar Magnetite exploration target has been estimated at 240 million tonnes at an expected grade between 30 to 35% Fe.

The Exploration Target sits within a tonnage range of 216- 264Mt, which is ±10% of the estimate of 240Mt.

A systematic review of the geology of Laconia’s projects and detailed geological mapping identified potential high-grade iron mineralisation along a 5.2km long strike length at the Mooletar project, comprised of two thick parallel bands of Banded Iron Formation (BIF) mineralisation separated by a layer of thin BIF/Mafic rock types.

The estimate was calculated by BM Geological Services using the results of the Reverse Circulation (RC) program and field mapping conducted by Laconia.

Table 1 shows the target tonnage of the Mooletar Magnetite Project. The estimate is conceptual in nature and is not an indication of a mineral resource as defined with the guidelines of JORC 2004.

Table 1: Total Exploration Target Tonnage

Magnetite	Length	Depth	3		Tonnes
Unit	(m)	(m)	Volume (000m)	SG	(Mt)
BIF 1	5,000	300	43,022	3.4	146
BIF 2	5,000	300	27,723	3.4	94
Total Tonnage					240

Note: The potential quantity and grade of the Mooletar Project is conceptual in nature and there has been insufficient drilling to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a mineral resource.

Engenium, a Perth base engineering has been engaged to complete a high level desk top review incorporating the results of the Mooletar Magnetite scoping Study to identify the various processing, infrastructure and logistic options for project development. Results from this study are expected in February.

Laconia Resources – December 2010 Quarterly Report

Results from the Mooletar Magnetite Scoping Study

• Two distinct, separate high grade BIF units have been mapped over 5 kilometres at Mooletar.

• A conceptual exploration target of 240 million tonnes exists between 415 mRL and 150 mRL.

• The high grade magnetite BIF’s have an average grade between 30 to 35% Fe.

The Mooletar Magnetite Project lies approximately 330km east of Geraldton, adjacent to sealed roads, and approximately 125km from the proposed Mid-West infrastructure corridor rail system that would access the Oakajee Port infrastructure.

The Mooletar Magnetite Project is 100% owned by Laconia and comprises an area of 75km[2] covering folded Archaean greenstone belt. The Project is situated over the eastern limb of the Mount Magnet greenstone belt and represents an area with little previous exploration proximal to a major gold producing area.

Kookynie Project - Gold, Kookynie Eastern Goldfields WA

(100% Laconia)

P40/1255, P40/1256

Subsequent to the end of the quarter, a drill program of 16 holes for 1,250 metres of Reverse Circulation drilling has been planned at the Kookynie project, and is due to commence in the first week of February.

The area is host to a number of old workings and includes the Lily Prospect. Some significant intersections have been recorded at the Lily Prospect which highlights the prospectivity for small high-grade deposits. Down dip and plunge extensions of these intersections represent drill targets for Laconia for its proposed drilling program.

The project is located in the Melita Domain of the Keith–Kilkenny Tectonic Zone within the NNWtrending Archaean Malcom greenstone belt approximately 200km from Kalgoorlie (see Project Location Map attached). The Keith-Kilkenny Tectonic Zone in the vicinity of Kookynie is a triangular shaped area hosting a succession of Archaean mafic-ultramafic igneous and metasedimentary rocks.

The most recent exploration activity on these tenements was conducted by Kookynie Resources between 1998 and 2000. Only a relatively small amount of previous drilling has been conducted to test the depth potential of this area. Highlights include:

• Three RC holes tested the down plunge extensions of the Lily workings where 1,347oz gold has been historically mined from very high-grade structures averaging 64g/t Au

• Two RC holes under the historic Kathleen workings where 707oz Au was recovered at an average grade of 27 g/t Au. The best results reported were 2m at 1.44g/t AU and 1m at 3.87 g/t Au

Independent mining consultants Snowdens conducted a detailed review of the tenement in a due diligence document, and provides the following comment;

Laconia Resources – December 2010 Quarterly Report

“Exploration in this area has not fully tested the depth extent of the historic workings and given the mining history along the Niagara trend, the potential to define further zones of high-grade, small to medium tonnage underground mineralisation is considered high”.

Table 2: Significant results from the Lily Prospect previously reported

Lily Prospect	Lily Prospect
Hole	Northing	Easting	from	To	Interval	g/t
RC065	6750145	347997	21	24	3	16.68
RC066	6750171	348012	21	22	1	26.2
RC068	6750190	348044	9	10	1	25.32
RC070	6748798	346152	29	33	4	59.83

Note1: Projected Coordinate System - GDA1994, MGA Zone 50

Kookynie Project Location Map

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Laconia Resources – December 2010 Quarterly Report

701 Mile Project – Gold and Base Metals, East Pilbara WA

(80% Laconia – excluding manganese and iron)

E52/1531, E52/2232, P52/1228, P52/1229, P52/1230, P52/1231

PREVIOUS EXPLORATION DATA

Three RC holes – 701M/1, 2 & 3 were drilled in 2006 by private explorer Oakover Gold targeting an aeromagnetic high in the vicinity of the rare earth anomalous float samples. The holes intersected a differentiated gabbro interpreted to be a sill. The gabbro contains unusual quartz - potash feldspar micrographic intergrowths and were described as orthopyroxene gabbro and altered “felsic gabbro” by the contract petrologist. The quartz – potash feldspar intergrowths within a gabbroic host are unusual and flag the possibility that the gabbro may have differentiated to a more felsic – possible alkaline intrusive phase.

The weathered cap to the gabbro provides some evidence for a link to a more alkaline felsic source with the presence of anomalous light rare earth (LREE)/high field strength (HFS) elements, phosphorous and barium in the weathered profile above the gabbro (refer Table 3)

Table 3 Drill holes 701M/1, 2 & 3 – near surface geochemistry

Drill Hole	Depth (m)	LREE/HFS elements (Ce+La+Y) (ppm)	P2O5 (ppm)	Ba (ppm	Regolith Description
701m/1 204600E 7350470N	0 – 4	147.9	4200	1430	Silcrete caprock
701m/2 204600E 7350550N	0 – 4	177	5750	1700	Fe-stained caprock
701m/3 204600E 7350630N	0 – 4	178	4600	1830	Ferricrete

These drilling results do not appear to explain the anomalous rock chip sample results achieved previously in the area including subcrop containing up to 0.23% combined REE. Elevated Ba values (300 – 500 ppm) are common in the area and barite veinlets have been found.

REGIONAL STRUCTURAL SETTING – CARBONATITE POTENTIAL

Figure 1 shows Laconia’s 701 Mile tenements in the southern Pilbara in relation to other known kimberlite, lamproite and carbonatite intrusives as well as major tectonic linears in the Pilbara. The dashed circle on the figure outlines an area representing a confluence of major northeast and westnorthwest trending structures rimming the Pilbara Archaean shield and thought to represent a likely target for an alkaline or alkali-related intrusive including carbonatite, kimberlite or lamproite.

Laconia Resources – December 2010 Quarterly Report

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100 km
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Figure 1 Laconia’s 701 Mile tenements (red) in relation to structural elements or linears (black lines) that rim the Pilbara Archaean shield as well as known kimberlite (circles), lamproite (triangles) and carbonatite (open cross) occurrences in the region (after Geology Australia and GSWA).

Upcoming Work

Regional auger traverses at 1 km intervals are planned to cover the northeast trending structural corridor. More detailed auger traverses at 100 to 200 m intervals are planned to assess areas known to contain anomalous REE rock chip values.

Gimlet Project – Gold, Kalgoorlie WA

(80% Laconia – 20% Pandell)

E26/120

No work completed on this Project this quarter.

Waukarlycarl y Project – Uranium, East Pilbara WA

(100% Laconia)

E45/3763

No work completed on this Project this quarter.

Laconia Resources – December 2010 Quarterly Report

Project Generation

The company continues to review joint venture/acquisition opportunities as well as maintain its own project generation strategy both in Australia and internationally.

Corporate

• Laconia has 478 shareholders with the top 20 holding 65% of the total issued capital.

• Cash at bank at the end of the quarter was $3.1 million .

Further reports and an overview of Laconia’s Projects can be viewed on the Laconia website (www.laconia.com.au).

Outlook for March 2011 Quarter

Gold

Kookynie

• 16 drill hole Reverse Circulation drilling program to start at the Kookynie Project.

Mooletar

• Results from engineering consulting group Engenium to identify the various processing, infrastructure and logistic options for project development. Results expected in February 2011.

Base Metals

Barramine

• Drill target generation from identified EM and geochemical anomalism.

701 Mile

• Regional auger traverse at 1 km intervals are planned to cover the northeast trending structural corridor. More detailed auger traverses at 100 to 200 m intervals are planned to assess areas known to contain anomalous REE rock chip values.

For further information on Laconia Resources Limited please contact:

Ian Stuart James Moses Managing Director Media and Investor Relations Laconia Resources Limited Mandate Corporate Phone: 08-9486 1599 Mobile: 0420 991 574 Mobile: 0419 394 919 james@mandatecorporate.com.au istuart@laconia.com.au

or visit our website at: www.laconia.com.au

Laconia Resources – December 2010 Quarterly Report

Competent Persons Statements

Information in this report relating tho The Mooletar Magnetite Project and has been complied by Mr Darryl Mapleson. Mr Darryl Mapleson who is a member of Australasian Institute of Mining and Metallurgy has compiled the information within this report that relates to mineralisation. Mr Mapleson has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken 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 and consents to the inclusion of this information in the form and context in which is appears in this report. “Note: The potential quantity and grade of the Mooletar Project is conceptual in nature and there has been insufficient drilling to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a mineral resource.”

Exploration results pertaining to the Barramine and 701 Mile Projects has been complied by Dr Craig Rugless. Dr Craig Rugless who is a member of Australasian Institute of Mining and Metallurgy has compiled the information within this report that relates to mineralisation. Dr Rugless has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity currently being undertaken to qualify as a Competent Person as defined in the 2004 edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and consents to the inclusion of this information in the form and context in which is appears in this report.

Appendix 5B Mining exploration entity quarterly report

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, 01/06/10.

Name of entity

Laconia Resources Limited

ABN 29 137 984 297	Quarter ended (“current quarter”)
29 137 984 297	31 December 2010

Consolidated statement of cash flows
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 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 (provide details if material) NetOperating Cash Flows	Current quarter $A’000	Year to date (6 months) $A’000
	- (147) - - (205) - 75 - - -	- (452) - - (511) - 91 - - -
	(277)	(872)
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 (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)	- - (14) - - - - - -	- - (15) - - - - - -
	(14)	(15)
	(291)	(887)

• See chapter 19 for defined terms.

Appendix 5B Page 1

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	(291)	(291)	(887)
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 (provide details if material) Share issue transaction costs Net financing cash flows			- - - - - -		- - - - - -
			-		-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter			(291) 3,386 -		(887) 3,982 -
			3,095		3,095
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
1.23 1.24		Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10		Current quarter $A'000 78 -
1.25 Explanation necessaryfor an understandingof the transactions Item 1.23 includes aggregate amounts paid to directors including salary, directors’ fees, consulting fees and superannuation. 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 During the quarter 500,000 ordinary shares with a deemed value of $48,500 were issued as part consideration for tenement acquisition. 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest		Explanation necessaryfor an understandingof the transactions
		Item 1.23 includes aggregate amounts paid to directors including salary, directors’ fees, consulting fees and superannuation.
	During the quarter 500,000 ordinary shares with a deemed value of $48,500 were issued as part consideration for tenement acquisition.
	Details of outlays made by other entities to establish or increase their share in projects in which the reportingentityhas an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

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

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

Estimated cash outflows for next quarter

Estimated cash outflows for next quarter
4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	200
	-
	-
	100
Total	300

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	181	344
	2,914	3,042
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	3,095	3,386

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter

• See chapter 19 for defined terms.

Appendix 5B Page 3

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Appendix 5B Mining exploration entity quarterly report

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	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (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 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	70,220,010	58,720,010
	500,000	500,000
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	3,000,000 200,000 20,500,000	- - -	Exercise price 20 cents 15 cents 20 cents	Expiry date 31 March 2013 31 August 2013 30 September 2014
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

• See chapter 19 for defined terms.

Appendix 5B Page 4

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Appendix 5B Mining exploration entity quarterly report

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.

Sign here:

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Date: 27 January 2011

(Company secretary)

Print name: Graeme Smith

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.

Appendix 5B Page 5

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