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1 AMEX RESOURCES LIMITED (ASX: AXZ) For personal use only 31 July 2012 QUARTERLY REPORT For the period ended 30 June 2012 The Manager Company Announcements Office Australian Securities Exchange Exchange Centre 4 th Floor, 20 Bridge Street Sydney NSW 2000 Dear Sir, QUARTERLY ACTIVITIES REPORT TO 30 JUNE 2012 Amex Resources Limited (Amex) is pleased to update shareholders and investors on the Company s activities during the quarter. Highlights are as follows: REPORT TO AUSTRALIAN SECURITIES EXCHANGE MBA DELTA IRONSANDS PROJECT - FIJI Mining Lease Granted Bankable Feasibility Study Completed, Confirms Project Viability Low Operating Cost, Positive Cash Flow in Year 1 Appointment of Chief Operating Officer Fiji Civil Works Commenced at Lautoka Port Facility Marketing of Product Well Advanced AMEX CORPORATE Placement to Sophisticated Investors to Fund Early Engineering Works Appointment of Mr Alan Senior as Non-Executive Director Appointment of Yibo Qiu as Marketing Director 3D Image of Fully Enclosed Stockpile Shed, Lautoka Port (wall and roof cladding not shown, to reveal internal layout)

2 MBA DELTA IRONSANDS PROJECT FIJI Mining Lease (SML60) Fijian Prime Minister Commodore Voreqe Bainimarama presented Company representatives with Special Mining Lease SML60 at a ceremony in the Government Offices, Suva on 14 June The Lease was signed by Acting Permanent Secretary for Lands and Mineral Resources Tevita Boseiwaqa, Director Mineral Resources Malakai Finau and Amex Managing Director Matthew Collard. SML60 has been granted for a 21 year period over the 220 million tonne Indicated Resource, as conversion of part of Amex s existing Special Prospecting Licence SPL1463, and covers 3, hectares. In compliance with lease conditions, payment has been made to the Mineral Resources Department of a performance guarantee including an environmental bond. Following assessment by the Department of Fisheries, payment has also been made for compensation to holders of traditional fishing rights within the SML area. The Company continues to liaise with the Government and Mineral Resources Department regarding its commitments to Community Development, to ensure that planned programmes are in accordance with Government priorities for the region. Bankable Feasibility Study The Bankable Feasibility Study (BFS) for the Mba Project was successfully completed at the end of June by Engenium Pty Limited as lead engineers, in conjunction with the Company and specialist consultants including dredging consultants BMT JFA, wharf consultants ATM Contracting and civil engineering consultants WesEng Engineering. Financial modelling was conducted by independent specialist group Southern Mining Consultants, using proprietary software. The BFS has provided independent confirmation that the Mba Delta Ironsands Project is financially and technically robust, and has the potential to deliver long-term significant benefits to Amex shareholders, the Lautoka-Ba region and the Fijian economy over a 20 year operating period. Key findings of the BFS include: Low Operating Cost of US$25.97 per tonne of Magnetite Product Net Present Value of US$387 Million Internal Rate of Return 56% Positive Cash Flow Year 1 Direct Capital Costs of US$63 Million Simple Dredging Operation, Chemical-Free Magnetic Separation, Transport of Concentrate by Barge to Nearby Port Site for Export Concentrate Production Planned Q The project will comprise a 12 million tonne per annum dredging operation feeding a floating concentrator plant for recovery of magnetite ironsands with a high vanadium content, by simple chemical-free magnetic separation. Following extraction of the magnetite, the sand tailings will be rehabilitated immediately to the lagoonal and intertidal sand flats of the Mba delta. The ironsand concentrate will be barged to nearby Lautoka Port where the sea water salt will be removed by washing, followed by drying and stockpiling in a fully enclosed purpose built storage facility of 75,000 tonnes capacity. It will then be exported via Handimax vessels from the Company s dedicated and purpose built wharf at the rate of 750,000 tonnes per annum. Capital cost estimate of US$79.96 million is made up a follows: US$29.39 million Marine Fleet (dredge, concentrator, barges, tug and support vessels) US$39.70 million Port Works (storage shed facility, wharf, plant and infrastructure) US$1.05 million Logistics Base (support for marine operations including fuel and crew change) US$16.82 million Indirect Costs (including owners costs, EPCM and contingency) 2

3 Operating cost was estimated to be US$25.97 per tonne of concentrate produced, equal to US$19.25 million annually. Breakdown is shown on the following pie chart: BFS Operating costs by Process Area Following completion of the BFS, the Company is moving quickly into EPCM phase with the detailed design component underway. Early civil construction works have commenced at the port, and Amex is focussed on moving into production as soon as possible. Appointment of Chief Operating Officer - Fiji Mr Bob Mansfield has been appointed as the Fiji-based Chief Operating Officer and will be responsible for construction and operation of the project. Bob has over forty years practical marine based international experience including the operation of dredges, port construction and ship loading. Mr Mansfield was previously with CITIC Pacific Mining Ltd where he was responsible for safe transition of their magnetite port project from construction stage through to operation, including overseeing construction and delivery of marine assets from China. He has also operated in the role of Project Manager for Rio Tinto Coastal Division on numerous projects. Mr Mansfield will be based in Fiji during the construction and operation of the project, and reports directly to the Managing Director. He is currently progressing tender documents and draft contracts for long lead items including the dredge, floating concentrator and Lautoka Port construction. Lautoka Port Local contractors have been appointed to construct the access road and fencing work at Amex s Port site, under the supervision of the Company s Lautoka-based civil engineering consultants WesEng Engineering. Work is scheduled for completion in August. Further geotechnical testing of ground conditions at the port site will be conducted as soon as the access road has been completed, to assist in final design of civil structures including the enclosed stockpile shed and related infrastructure. A Suva-based group has been appointed to undertake the works, and will mobilise a specialist drill rig shortly. 3

4 The Company is committed to using local firms wherever possible throughout the construction and operational phases of the project. Access Road, Footpath and Fence Construction at Amex Lautoka Port Site Tenders for marine works at the Lautoka Port are scheduled to be received during August. The tenders have been called for construction of the berth wall, associated concrete aprons and dredging of the berth pocket and access corridor to allow access by Handimax-sized vessels. CORPORATE ACTIVITIES Corporate activities during the quarter focussed on strengthening the board s project implementation experience and Chinese-based marketing expertise. Early Engineering Works Funding The Company completed a private placement to sophisticated investors to assist in the funding of early engineering works. $2 million was raised at an issue price of $0.95 per share, increasing the Company s cash balance to $9.7m. The focus for the Company in the short term is to complete debt funding arrangements with the flexibility of an equity placement pending market conditions and subject to shareholder approval in the forthcoming General Meeting on 23 August Appointment of Mr Alan Senior Mr Senior was appointed to the role of non-executive director to strengthen the Board s practical project implementation experience. Mr Senior has over 40 years experience in engineering design and project development, including bulk material handling facilities at several Australian ports. Through his engineering consultancy, Mr Senior has been responsible for management of the recently completed Mba Delta Bankable Feasibility Study for the Company. His in-depth knowledge of the Project, the BFS and his extensive previous operational experience make him an important and valuable addition to the Board as the project moves into the development and construction phases. 4

5 Appointment of Mr Yibo Qiu as Marketing Director Mr Qiu was appointed to the executive position of Director of Marketing in May His appointment is indicative of the importance of negotiation of sale contracts at this stage of the Project s development. The Company anticipates completion of MOU agreements with steel mills in China during the coming month. Fijian Government Liaison Amex continues to liaise with the Fijian Government and the Mineral Resources Department, providing regular updates on project development and production timelines. During the quarter, the Company presented to the Prime Minister and Minister for Lands & Mineral Resources, Commodore Voreqe Bainimarama. Additional meetings were held with the Attorney-General and Minister for Industry and Trade, Mr Aiyaz Sayed-Khaiyum and the Reserve Bank of Fiji. Amex Chairman Dr Qin Xiao with Attorney-General Mr Aiyaz Sayed-Khaiyum Pilbara Iron Ore Paraburdoo South exploration licence E47/2435 was granted in late June, immediately south of Rio Tinto s Paraburdoo East iron ore open pit mining operations. It lies on the southern margin of the Pilbara Craton, over a faulted outlier of Hamersley Group sediments. The licence is situated approximately 5 kilometres northwest of the Company s Mt Maguire project E52/2561. Planning of field programmes is underway. WA Non- Iron Ore Projects An agreement relating to divestment of the Company s non-core copper-gold-nickel projects in the Eastern Goldfields with Aurelia Resources Ltd expired at the end of June. The Company is considering alternative offers it has received for these tenements which will add value for shareholders. 5

6 CONCLUSION Over the past quarter the executive team have been extremely focussed on completion of the BFS and meeting regulatory requirements necessary for granting of a Special Mining Lease. The positive outcomes on both fronts are extremely pleasing, and allow the Company to now move to the next project stages. The Company is confident of implementing a smooth transition from the BFS into construction and development, especially with the recent strengthening of experience and expertise at both Board and management levels. We look forward to continue updating shareholders on EPCM progress as well as anticipated developments with commodity sale agreements. Yours faithfully, Matthew Collard Managing Director Amex Resources Limited Competent Persons Declaration Information in this report that relates to the Mba Delta Ironsands Project, specifically Exploration Results, Mineral Resources or Ore Reserves, is based on information compiled by Geoffrey Richards of Lionhart Consulting Services, who is a Member of The Australian Institute of Geoscientists. Mr. Richards has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration and to the activity 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. Mr. Richards consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Information in this report that relates to the Company s other project areas, specifically Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Timothy Putt of Amex Resources Ltd, who is a member of The Australian Institute of Geoscientists and the Society of Economic Geologists. Mr. Putt has sufficient experience that is relevant to the various styles of mineralisation and types of deposit under consideration, and to the activity being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves. Timothy Putt consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Forward-Looking Statements This document may include forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Amex Resources Limited s planned exploration programme and other statements that are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may, "potential," "should," and similar expressions are forward-looking statements. Although Amex Resources Limited believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. 6

7 ACN Corporate Information Directors Investor Relations Dr Qin Xiao Mr Matthew J. Collard Mr Yibo Qiu Mr Alan Senior Mr Timothy S. Putt Non-Executive Chairman Managing Director Marketing Director Non -Executive Director Non - Executive Director Enquiries concerning this Report may be directed to: Matt Collard Managing Director Tel: +61 (0) Company Secretary Shareholder Enquiries Mr Gary Dunlop Company Secretary Registered and Principal Office 97 Outram Street West Perth Western Australia 6005 Tel: +61 (0) Fax: +61 (0) Matters relating to shares held, change of address and tax file numbers should be directed to the share registry at: Security Transfer Registrars Pty Ltd PO Box 535 Applecross Western Australia 6953 Tel: +61 (0) Issued Capital ASX code: AXZ At 31 July 2012, Amex had 566 shareholders with issued capital of 74,871,052 fully paid ordinary shares and 5,900,000 unlisted options. 7