Castle Report Template

December Quarterly Report 2008

Castle Minerals Limited December 2011 Quarterly Report

Highlights

Wa Project

Maiden Mineral Resource estimate for the Kandia prospect announced totalling 3.3mt @ 1.0g/t gold for 107,500 ounces

Total Gold Resources in Ghana increased by 68% to 267,000 ounces

2012 northern Ghana field season well underway with:

» 6,137 soil samples collected to date testing Baayiri, Funsi and Kandia East prospects

» Two auger drill rigs operating on Wa Project as part of an initial 20,000m auger program

» Castle’s own drill rig along with support vehicles and associated spares has arrived in Ghana and should commence drilling shortly with the aim of drilling continuously until the wet season (July) for approximately 30,000m

» 7,000m contract RC drill program to commence shortly testing Wa South, Baayiri, Julie West and Kandia targets

» Two new high grade vein style gold targets defined at Julie West for immediate RC drill testing with laminated vein rock chips up to 37.3 g/t gold

» Regolith Study completed at Wa South and Baayiri Prospects

» Exploration office established in Wa, two additional geologists and two experienced drillers employed along with associated support personnel

» Wa Project tenure strengthened with original 3 Reconnaissance Licences covering 10,000km2 converted to 18 Prospecting Licences and four new Reconnaissance Licences

Antubia Project

723 soil samples taken at Antubia Project in south west Ghana

Akoko Project

Akoko diamond drilling intercepts coherent gold mineralisation and confirms geological interpretation at Akoko. Project licences renewed

Corporate

End of quarter cash position of $5.6m

Azumah Resources Limited (ASX:AZM) increased Castle shareholding to 15.29%

Castle Minerals Limited

Unit 6, 1 Clive St West Perth

WA 6005

ACN 116 095 802

PO BOX 437 West Perth

WA 6872 Tel: +618 9322 7018 Fax: + 618 9284 5413

www.castleminerals.com Email: [email protected]

Registered Office Unit 6, 1 Clive St

West Perth WA 6005

Ghana Office PO Box CT9 East Cantonments,

Near NAFTI Accra, Ghana

Tel: +233 21 771 889

Share Registry Enquiries Security Transfer Registrars Pty

PO Box 535 Applecross

WA 6953 Tel: (08) 9315 2333 Fax: (08) 9315 2233

www:securitytransfer.com.au

Capital Structure Quoted Shares: 113.7 million

Unlisted Options: 1.05m @ 40c

ASX Code: CDT

Board Members Michael Ashforth

Non Executive Chairman

Michael Ivey Managing Director & CEO

Campbell Ansell Non Executive Director

Des Kelly Company Secretary

27th January 2012

December 2011 Quarterly Report F

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mailto:[email protected]�

Castle Minerals Limited December 2011 Quarterly Report Page 2 of 12

Wa Project (Castle Minerals 100%) Exploration on the extensive Wa Project (10,000km2) is focused on four regional scale highly prospective gold corridors known as; • Julie-Jang Trend 50km long trend that includes the Baayiri discovery • Kandia Trend 30km corridor of anomalous gold in soils • Wa South (Batie West trend) 60km long corridor on intersection of two greenstone belts • Wa-Lawra Greenstone Belt 80km of untested greenstone belt stratigraphy

2012 Exploration Season Underway Exploration within the Wa Project commenced in November 2011 as the wet season rains abated and access was re-established. The focus for 2012 will be on the following prospects towards our ultimate goal of defining sufficient standalone gold resources capable of commercial development; Baayiri: a large previously unexplored area of anomalous soil geochemistry (12 x 6km) only limited by

the boundaries of soil sampling that returned several highly encouraging RC intercepts in 2011 including 52m @ 2.02g/t gold1.

Julie West: hosts an outcropping high grade vein discovered by Castle that has a resource of 415,000

tonnes @ 4.2g/t gold. RC drilling 4km north intersected 9m@ 22.1 g/t gold2 and recent mapping suggests that the follow up drilling completed last year did not effectively test the extent of this high grade intercept. This area will be a priority for RC drilling along with areas of untested laminated vein subcrop reporting rock chips up to 37g/t gold3.

Kandia: A +20km granite sediment contact zone hosting sediment hosted gold mineralisation. In 2011

a maiden Mineral Resource estimate was announced totalling 3.3mt @ 1.0g/t gold for 107,500 ounces4. RC and RAB programs are proposed to extend known mineralisation and test parallel and strike extent targets.

Wa South: a soil covered area that contains the intersection of two greenstone belts and the interpreted

extension to the Batie West Shear. Wide spaced aircore drilling reported very promising results including 26m @ 0.24 g/t gold from 25m to EOH and 10m @ 0.54 g/t gold from 25m5. RC and RAB drill programs will be undertaken to test the extent of this mineralisation.

Progress to date includes: 6,137 soil samples collected from Wa Project testing Baayiri, Funsi and Kandia East prospects

Two auger drill rigs operating on Wa Project as part of an initial 20,000m auger program

Castle’s own drill rig along with support vehicles and associated spares has arrived in Ghana and should commence drilling shortly with the aim of drilling continuously until the wet season (July) for approximately 30,000m

7,000m contract RC drill program to commence shortly testing Wa South, Baayiri, Julie West and Kandia targets

Two new high grade vein style gold targets defined at Julie West for immediate RC drill testing

Regolith Study completed at Wa South and Baayiri Prospects

Exploration office established in Wa, two additional geologists and two experienced drillers employed along with associated support personnel

Wa Project tenure strengthened with original 3 Reconnaissance Licences covering 10,000km2 converted to 18 Prospecting Licences and four new reconnaissance licences

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WA PROJECT

The Wa Project covers approximately 10,000km2 in NW Ghana near the border with Burkina Faso and consists of four Reconnaissance Licences and eighteen Prospecting Licences. The outcropping Julie West gold vein was discovered by Castle in June 2008, exploration since then has led to a gold resource of 415,000 tonnes @ 4.2g/t gold being established for a total of 56,200 ounces. In December 2011 a maiden Mineral Resource estimate for the newly discovered Kandia prospect was announced totalling 3.3mt @ 1.0g/t gold for 107,500 ounces. The Baayiri prospect was discovered in 2011 with an RC intercept of 52m @ 2.02g/t gold and is a major exploration target in 2012.

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Kandia Mineral Resource Estimate During the quarter Castle announce a Maiden Mineral Resource Estimate for its Kandia gold prospect of 3.3Mt @ 1.0g/t gold for 107,500 ounces. Gold mineralisation was first discovered on this greenfields prospect by Castle in 2010 with the first resource drilling being undertaken in 2011. Since that time Castle has completed extensive soil sampling, airborne geophysical surveys and completed 264 RC drill holes for 19,541m. The Resource estimate for Kandia was completed for two mineralised zones named the “4000 Zone”and “8000 Zone” that are situated along a regionally mineralised granite/sediment contact termed the Kandia Trend that can be traced for over 20km.

Type Tonnes Au Au Tonnes Au Au Tonnes Au Aut g/t Ounces t g/t Ounces t g/t Ounces

Oxide 131,300 1.0 4,100 51,000 1.3 2,100 183,000 1.1 6,200Fresh 1,841,500 1.0 58,700 1,327,200 1.0 42,500 3,169,000 1.0 101,200Total 1,973,000 1.0 62,900 1,379,000 1.0 44,600 3,351,000 1.0 107,500

Kandia DepositNovember 2011 ID2 Mineral Resource Estimate

TotalIndicated Inferred

Table 1: Mineral Resource Summary for the Kandia Gold Prospect The definition of this shallow gold resource at Kandia is an excellent outcome being achieved less than 10 months since RC drilling first commenced along the Kandia Trend and clearly demonstrates that outcropping gold deposits are still capable of being discovered in Ghana. It is the fourth greenfields gold occurrence to be discovered by Castle since 2008 within the Wa Project - these deposits are spaced over 40km in different stratigraphic sequences confirming that the Wa Project has been subject to a variety of gold mineralising episodes and styles. The total gold resource for the Wa Project now totals 163,700 ounces and total gold resources for Castle in Ghana total 267,000 ounces (Table 2). All gold resources have been discovered by Castle after completing geochemical soil programs and following up anomalous areas with RC and/or diamond drilling. Gold mineralisation at Kandia is hosted within silicified and weakly pyritic sediments (shales and siltstones) and generally forms a regular west dipping zone within a broader sediment package bounded to the east by granite. Wa Project Indicated Inferred Total

Tonnes Au Au Tonnes Au Au Tonnes Au Au t g/t Ounces t g/t Ounces t g/t Ounces

Julie West 383,000 4.2 52,100 32,000 4.0 4,100 415,000 4.2 56,200 Kandia 4000 Zone 1,973,000 1.0 62,900 1,150,000 0.8 31,200 3,123,000 0.9 94,100 Kandia 8000 Zone 229,000 1.8 13,400 229,000 1.8 13,400

Total 2,356,000 1.5 115,000 1,411,000 1.1 48,700 3,767,000 1.4 163,700 Note: A 0.5g/t Au cut-off has been used for the 4000 Zone, and a 1.0g/t Au cut-off has been used for the 8000 Zone

Akoko Project Indicated Inferred Total Tonnes Au Au Tonnes Au Au Tonnes Au Au t g/t Ounces t g/t Ounces t g/t Ounces

Akoko South 610,300 1.3 25,900 610,300 1.3 25,900 Akoko North 525,000 1.6 27,007 578,000 2.7 50,174 1,103,000 2.2 77,400

Total 525,000 1.6 27,007 1,188,300 2.0 76,074 1,713,300 1.9 103,300

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Total Indicated Inferred Total Tonnes Au Au Tonnes Au Au Tonnes Au Au t g/t Ounces t g/t Ounces t g/t Ounces

Wa Project 2,356,000 1.5 115,000 1,411,000 1.1 48,700 3,767,000 1.4 163,700 Akoko Project 525,000 1.6 27,007 1,188,300 2.0 76,074 1,713,300 1.9 103,300

Total 2,881,000 1.5 142,007 2,599,300 1.5 124,774 5,480,300 1.5 267,000

Table 2: Castle Minerals Ghana Mineral Resource Estimate

Kandia Project Location

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Kandia Trend on TMI Magnetic Image

4000 Zone 94,100 Ozs

+20km Kandia Trend

8000 Zone 13,400 Ozs

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Koda Hill Prospect (Wa Project) Koda Hill forms part of the 50km long Julie – Jang Trend in north-west Ghana within the larger Wa Gold Project where little or no previous exploration has been undertaken. Koda Hill was initially defined by soil geochemical sampling in 2011. Infill and extensional RC drilling was completed at the Koda Hill prospect during 2011 with wide zones of low grade mineralisation reported from composite RC drill samples. Individual 1m split results have now been received after lengthy assay delays confirming the widespread but low tenor mineralisation hosted by distinctive quartz veined porphyry that has intruded a sequence of shales and siltstones. Significant 1m split results from the RC drilling include: 11KORC021 12m @ 0.41 g/t gold from 7m 11KORC026 9m @ 0.58 g/t gold from 21m 11KORC027 12m @ 0.56 g/t gold from 0m

21m @ 0.68 g/t gold from 31m 11KORC030 19m @ 0.35 g/t gold from 72m 11KORC032 28m @ 0.36 g/t gold from 33m 11KORC035 37m @ 0.25 g/t gold from 25m

2m @ 1.00 g/t gold from 71m 4m @ 1.00 g/t gold from 80m 11KORC043 2m @ 1.24 g/t gold from 0m

Koda Hill mineralisation is, so far, unique to the area and this style of mineralisation is capable of hosting bulk tonnage gold deposits. Ongoing work at Koda Hill will aim at determining the ultimate size of the porphyry discovered and explore for similar systems in the area.

Detailed magnetic image showing prospects within the Julie- Jang Trend

Baayiri Gold Discovery F

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AKOKO PROJECT (Castle Minerals 100%)

The Akoko Project is located in the Ashanti Gold Belt 25km south of Tarkwa and hosts a Mineral Resource estimate for Akoko North and Akoko South deposits of 1.7mt @ 1.9g/t gold for 103,300 ounces.

During the quarter diamond drilling and soil sampling programs were completed6. Diamond Drilling Four diamond holes were completed for a total of 687.1m targeting the known oxide resource and testing for sulphide gold mineralisation at depth. The holes were cored from surface and oxide gold intercepts correlated very well with the historic RC drilling as well as providing important geotechnical and structural data. Significant results from this work included 12m @ 2.68 g/t gold from 24m (11ANDD02) and 11.8m @ 3.24 g/t gold from 0.7m (11ANDD03) This data is consistent with the interpretation that the oxide gold mineralisation at Akoko North is part of a flat lying supergene enriched zone. The mineralised zones are strongly weathered offering excellent physical mining characteristics and low cost, high recovery processing options. The resource interpretations and RC drilling completed to date are consistent with this model. Castle has previously reported an Indicated and Inferred resource of 1.1mt @ 2.2g/t gold for 77,000 ounces at Akoko North. Soil Geochemical Sampling Soil sampling at the Akoko North and Akoko East prospects was completed with 1,018 samples collected and analysed for gold. This work generated a number of new anomalies and better defined earlier wide spaced sampling. The eastern portion of the Akoko Project has been subject to very limited exploration. Soil traverses were completed on mainly 1,600m spacings to extend soil coverage to the eastern limits of the Project area. This work successfully defined a number of new strike extensive gold trends that now require infill sampling and mapping. At Akoko North nine well defined anomalies that aggregate of over 10 strike kilometres were defined offering immediate targets for drill testing. These anomalies are sub parallel to the 77,000 ounce Akoko gold resource and detailed ground inspection and mapping will now be undertaken.

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Clockwise from top right; Akoko North location plan, Akoko North drill hole plan, Akoko North soil geochemistry

and Akoko East soil geochemistry

12m @ 2.68 g/t gold (ANDD002)

11.8m @ 3.24 g/t gold (ANDD003)

Akoko East

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ANTUBIA PROJECT (100% Castle Minerals) Antubia is located approximately 370km west-northwest of Accra, in the Sefwi gold belt and is ~90km southwest of the Ahafo gold mine operated by Newmont. A review of previous exploration was completed during the quarter highlighting several areas that warranted further investigation. In the south west corner of the project area 703 soil samples were collected from three areas infilling wider spaced work undertaken by Castle in 2006-7. These areas are close to the Kenyase shear that to the north is associated with the 16Moz Ahafo gold deposit7. Results for this work will be reported when assay results are received and compiled.

Antubia Project Location and Geology

ANTUBIA PROJECT Area of soil sampling

targeting wide spaced gold anomalism adjacent to the

Kenyase Shear

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Corporate

Cash Position At Quarter end Castle had total issued capital of 113.7M shares and 1.05 million options on issue. Cash reserves were $5.6 million.

Asset Purchases Castle Minerals through its Ghanaian subsidiary companies has purchased of an Aircore/RAB exploration drill rig and associated spares and support vehicles. The rig, vehicles and spares have arrived in Ghana and are expected to clear customs shortly.

Share Register Azumah Resources Limited (ASX:AZM) announced an increase in their Castle shareholding from 14.74% to 15.29%. For further information please contact: Michael Ivey Managing Director & CEO +61(8) 9322 7018 www.castleminerals.com About Castle: Castle Minerals listed on the Australian Stock Exchange in May 2006 (ASX code 'CDT') and has since acquired the rights to six mineral projects in Ghana, West Africa including Akoko, Antubia, Banso, Bondaye, Opon Mansi (application) and Wa covering more than 11,000km². All granted projects are 100% owned by Castle Minerals (subject to Ghanaian Government right to a free-carried 10% interest). Castle’s corporate objectives are exploration and development of its six projects in Ghana and the acquisition and exploration of other mineral resource opportunities, particularly in West Africa. The country of Ghana has a long history of gold mining and exploration and is Africa’s second largest gold producer behind South Africa. References/Footnotes 1 Castle ASX Release 25/10/11 2 Castle ASX Release 08/03/10 3 Castle ASX Release 03/09/10 4 Castle ASX Release 05/12/11 5 Castle ASX Release 12/10/11 6 Castle ASX Release 09/11/11 7 www.newmont.com

= == == == Information in this announcement that relates to Exploration Results is based on information compiled by Haydn Hadlow, Castle Minerals Limited Exploration Manager, who is a Member of The Australasian Institute of Mining and Metallurgy. Haydn Hadlow is a permanent employee of Castle Minerals Limited and has sufficient experience that 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 JORC Code. Haydn Hadlow consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

Information in this announcement that relates to the Mineral Resources is based on information compiled by Michael Ivey, Castle Minerals Limited Managing Director, who is a Member of The Australasian Institute of Mining and Metallurgy. Michael Ivey is a permanent employee of Castle Minerals Limited and has sufficient experience that 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 JORC Code. Michael Ivey consents to the inclusion in the announcement of the matters based on the information in the form and context in which it appears.

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http://www.castleminerals.com/�


Grid: UTMProspect: Koda HillProject: Wa

Hole Number Northing Easting mRL Grid Az. Dip Hole Depth Intercept11KORC021 1121501 584400 284 180 -50 75 2m @ 0.33 g/t gold from 0m

12m @ 0.41 g/t gold from 7m

11KORC023 1121583 584399 284 180 -50 73 4m @ 0.33 g/t gold from 50m

































Koda Hill Significant RC Drilling Intercepts

Notes • Assays reported from 1m split samples from Reverse Circulation drilling. • No top cut applied. • Gold analysis by 50g Fire Assay/AAS. Analysis performed by Intertek Laboratories, Tarkwa, Ghana. • QAQC completed with no issues noted. • Hole collars picked up by GPS.

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Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

Castle Minerals Limited ABN Quarter ended (“current quarter”)

83 116 095 802 31 December 2011

Consolidated statement of cash flows

Cash flows related to operating activities

Current quarter $A’000

Year to date (6 months)

$A’000 1.1 Receipts from product sales and related debtors

- -

1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration

(796) - -

(182)

(2,205) - -

(451) 1.3 Dividends received - - 1.4 Interest and other items of a similar nature

received 45 112

1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other (provide details if material) - -

Net Operating Cash Flows (933) (2,544)

Cash flows related to investing activities

1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets

- -

(385)

- -

(512) 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 (385) (512) 1.13 Total operating and investing cash flows

(carried forward) (1,318) (3,056) For

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+ See chapter 19 for defined terms. Appendix 5B Page 2 17/12/2010

1.13 Total operating and investing cash flows

(brought forward) (1,318) (3,056)

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) - (18) Net financing cash flows - (18)

Net increase (decrease) in cash held

(1,318) (3,074)

1.20 Cash at beginning of quarter/year to date 6,989 8,772 1.21 Exchange rate adjustments to item 1.20 - (27)

1.22 Cash at end of quarter 5,671 5,671

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 91

1.24

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

1.25

Explanation necessary for an understanding of 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 215,000 ordinary shares with a deemed value of $51,600 were issued as additional consideration for

the acquisition of interest in tenements (additional consideration upon announcement of JORC compliant gold resource estimate).

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

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 Nil

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3.2 Credit standby arrangements

Nil Nil

Estimated cash outflows for next quarter

$A’000 4.1 Exploration and evaluation

900

4.2 Development

-

4.3 Production

-

4.4 Administration

100

Total

1,000

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.


Previous quarter $A’000

5.1 Cash on hand and at bank 671 989

5.2 Deposits at call 5,000 6,000

5.3 Bank overdraft - -

5.4 Other (provide details) - -

Total: cash at end of quarter (item 1.22) 5,671 6,989

Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements acquired or increased

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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

113,717,677 113,717,677

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

215,000

215,000

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)

1,050,000

-

Exercise price 40 cents

Expiry date 1 September 2016

7.8 Issued during quarter

7.9 Exercised during quarter

7.10 Expired during quarter

3,500,000 - 35 cents 21 December 2011

7.11 Performance Rights

2,000,000

-

Expiry date 22 November 2016


2,000,000 - 22 November 2016


7.14 Expired/cancelled during quarter

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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 5).

2 This statement does /does not* (delete one) give a true and fair view of the matters

disclosed. Sign here: Date: 27 January 2012

(Company secretary) Print name: Desmond J Kelly 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 6: Exploration for and Evaluation of

Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International

Financial Reporting 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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Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

Castle Minerals Limited ABN Quarter ended (“current quarter”)

83 116 095 802 31 December 2011

Consolidated statement of cash flows

Cash flows related to operating activities


Year to date (6 months)

$A’000 1.1 Receipts from product sales and related debtors

- -

1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration

(796) - -

(182)

(2,205) - -

(451) 1.3 Dividends received - - 1.4 Interest and other items of a similar nature

received 45 112

1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other (provide details if material) - -

Net Operating Cash Flows (933) (2,544)

Cash flows related to investing activities

1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets

- -

(385)

- -

(512) 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 (385) (512) 1.13 Total operating and investing cash flows

(carried forward) (1,318) (3,056)



1.13 Total operating and investing cash flows

(brought forward) (1,318) (3,056)

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) - (18) Net financing cash flows - (18)

Net increase (decrease) in cash held

(1,318) (3,074)

1.20 Cash at beginning of quarter/year to date 6,989 8,772 1.21 Exchange rate adjustments to item 1.20 - (27)

1.22 Cash at end of quarter 5,671 5,671

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 91

1.24

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

1.25

Explanation necessary for an understanding of 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 215,000 ordinary shares with a deemed value of $51,600 were issued as additional consideration for

the acquisition of interest in tenements (additional consideration upon announcement of JORC compliant gold resource estimate).

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

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 Nil



3.2 Credit standby arrangements

Nil Nil

Estimated cash outflows for next quarter

$A’000 4.1 Exploration and evaluation

900

4.2 Development

-

4.3 Production

-

4.4 Administration

100

Total

1,000

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.


Previous quarter $A’000

5.1 Cash on hand and at bank 671 989

5.2 Deposits at call 5,000 6,000

5.3 Bank overdraft - -

5.4 Other (provide details) - -

Total: cash at end of quarter (item 1.22) 5,671 6,989

Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements 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 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

113,717,677 113,717,677

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

215,000

215,000

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)

1,050,000

-

Exercise price 40 cents

Expiry date 1 September 2016



7.10 Expired during quarter

3,500,000 - 35 cents 21 December 2011

7.11 Performance Rights

2,000,000

-

Expiry date 22 November 2016


2,000,000 - 22 November 2016


7.14 Expired/cancelled during quarter



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 5).

2 This statement does /does not* (delete one) give a true and fair view of the matters

disclosed. Sign here: Date: 27 January 2012

(Company secretary) Print name: Desmond J Kelly 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 6: Exploration for and Evaluation of

Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International

Financial Reporting 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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