31st October 2013

Quarterly Report - September 2013

Forte Energy NL ("Forte Energy" or "the Company") (ASX/AIM: FTE) is an emerging international uranium company focused on the exploration and development of a portfolio of uranium assets in the Republics of Mauritania and Guinea, West Africa.

Highlights of 3rd Quarter to 30th September 2013

Scout drilling was completed in early July to test the potential extensions of the Zednes shear zone to the south of the A238 prospect

Review of cost base completed leading to reduction in ongoing overheads. Shareholder approval obtained for placement to raise more than £900,000

(approximately A$1.5 million).

Forte Energy U3O8 JORC resources (all at a 100ppm cut-off):

* A238NW Anomaly included in the A238 Inferred Resources

Progress

Commenting on the quarter, Mark Reilly, Managing Director of Forte Energy, said:

"Forte Energy continues to investigate potential corporate opportunities which may complement the Company's strategic positioning. Poor sentiment in the uranium market and the wider mining sector remains; however we believe that we are well positioned, with adequate financing facilities available, to take advantage of any suitable value-accretive opportunities as they arise."

During the quarter, Forte Energy has concentrated on the assessment of external strategic opportunities in the market, with a view to building on the significant organic growth already achieved by the Company to date; and the instigation of a strict cost control programme, alongside the optimisation of working capital management.

Given the Company's aggressive cost reduction measures, minimal expenditure has been incurred during this quarter and this is expected to continue until the commencement of the next exploration field season later this year.
In light of the challenging conditions being experienced by the mineral exploration industry and the worldwide uranium market, management continues to explore a number of strategic opportunities that have become available in the depressed environment and we will update shareholders on these as and when appropriate.
Despite the continued pressures evident in the worldwide uranium market, Forte Energy retains its confidence in the compelling medium to long term supply/demand fundamentals, which indicate a sizeable supply shortfall in coming years. We believe that Forte Energy's robust organic growth and its potential to take advantage of external opportunities will position the Company well to capitalise on the strong long term fundamentals of the uranium market.

Republic of Mauritania, West Africa

Forte Energy is one of the largest uranium exploration licence holders in Mauritania, with ten 100%-owned licences, covering over 7,000 km² in the vicinity of Bir Moghrein in the North West, close to the border with Western Sahara.

Figure 1: Mauritanian Licences

Recent exploration work in Mauritania has mainly been focussed on better understanding the areas close to the A238 prospect and at Hassi Baida. Hassi Baida is a highly prospective calcrete area situated approximately 50km north-east of the existing Forte Energy licences and covers over 800km2.
Results are expected shortly from the NQ Aircore drilling programme completed in July in the areas close to the A238 prospect and at Hassi Baida. The NQ Aircore drilling programme concentrated on the central and southern areas and comprised of 214 holes averaging 10m in depth and totalled 2,190m. This was followed by a targeted scout drilling programme in the covered area 7km to the south east of the A238 prospect and to a prospective area to the north east of the A238 prospect.

Republic of Guinea, West Africa

Firawa and Bohoduo

The Firawa project consists of two licences, totalling 286km2, which are located approximately 25km to the east of Kissidougou. The Bohoduo project consists of two licences, covering an area of 294km2, situated approximated 120km north east of Firawa.

Figure 2: Guinea Licences

No significant works were carried out in Guinea during the quarter with the Company focussing instead on work in Mauritania and corporate activities.
Forte Energy holds four 100%-owned uranium exploration licences in Guinea, West Africa, covering two separate project areas.

Corporate

In light of the continuing challenging market conditions being experienced, management has carried out a programme of strict cost control and working capital optimisation. An extensive review of overheads and other areas of expenditure was undertaken that will result in significant cost reductions going forward.
A general meeting was held on the 31st October 2013 at which shareholder approval was obtained for a placement to raise up to £918,000 (approximately $1,539,000) before costs at 0.4 pence (approximately 0.7 cents) per share. The placement was carried out in two tranches. £168,000 (approximately A$285,000) was raised before expenses in the first tranche completed on 16 August 2013 with a further £739,500 (approximately A$1.25 million) before expenses raised in the second tranche following receipt of shareholder approval at the general meeting held today. Approval was also obtained to offer a share purchase plan to shareholders. Further details of the share purchase plan will be provided shortly.
In September 2013 the Company announced an agreement with Elementos Ltd (ASX: ELT) to vary the terms of an Option To Purchase agreement in relation to its Millenium mining leases in Queensland. Under the revised agreement, Forte Energy will receive
$100,000 cash instead of the previous consideration of $160,000 in cash or scrip. The terms were renegotiated partly in an effort to achieve settlement, which is expected to occur in the quarter to December 2013.
During the quarter, the Company announced the proposed acquisition of Leo Mining and Exploration Limited ("Leominex"), an unlisted company with interests in uranium and rare earth elements ("REE") assets in Africa. However the proposed acquisition did not proceed because the parties could not agree on certain proposed material amendments to the agreed terms including the withdrawal by Leominex of some of the assets. Forte Energy

believed that going ahead with the Acquisition was not in the best interests of the Company and its shareholders as a whole. The Company is continuing to assess potential corporate actions that may add value.
The Company still has £9.4 million ($16 million) available under its £10 million Equity Financing Facility ("EFF") with Darwin Strategic Limited, a majority owned subsidiary of Henderson Global Investors' Volantis Capital. In June 2013, Forte announced that it had entered into a two year convertible loan facility for up to US$1,000,000 with Dutchess Opportunity Cayman Fund, Ltd ("Dutchess") and that it had received an initial drawdown of US$600,000. Dutchess subsequently elected to convert the amount drawn down into shares and was issued a total of 117,475,000 shares in accordance with the terms of the loan agreement. An amount of US$400,000 remains available to the Company under this facility.
The Company only draws down on its financing facilities as and when required. However with additional funds to be received from the placement approved at today's general meeting and with minimal expenditure planned going forward, the Company has no current plans to draw on its financing facilities.
Mark Reilly
Managing Director

For further information contact: Mark Reilly, Managing Director

Forte Energy NL Tel: +44 (0) 203 384 7474

Geoff Nash/Ben Thompson Tel: +44 (0)207 220 0500

Elizabeth Johnson (broking)

finnCap

Bobby Morse/ Cornelia Browne

Buchanan Tel: +44 (0) 207 466 5000

Stuart Laing

RFC Ambrian Ltd Tel: +61 (0) 8 9480 2506 (AIM Nominated Adviser to the Company)

Forte Energy NL

Australia United Kingdom

Suite 3, Level 3 3C Princes House

1292 Hay Street 38 Jermyn Street

West Perth WA 6005 London SW1Y6DN

Ph: +61 (0)8 9322 4071 Ph: +44 (0)203 3847474

Fax: +61 (0)8 9322 4073 Fax: +44 (0)207 2878387

Email: [email protected] Email: [email protected]

Web: www.forteenergy.com.au

About Forte Energy

Forte Energy is an Australian-based minerals company focused on the exploration and development of uranium and associated bi-products in Mauritania and Guinea in West Africa. The Company has an extensive pipeline of assets and total JORC resources of 76.8Mt @ 266ppm

U₃O₈for 44.9Mlbs contained U₃O₈ (100ppm cut-off).

Its flagship assets are the A238 prospect (23.4Mlbs U₃O₈) and the Bir En Nar project (2.06Mlbs

U₃O₈) in Mauritania, and the Firawa Project in Guinea (19.5Mlb U₃O₈).

Forte Energy U₃O₈ JORC resources (all at a 100ppm cut-off):

* A238NW Anomaly included in the A238 Inferred Resources

Forte Energy's strategy is to target high grade uranium ore bodies and build a low cost West African-focused uranium producer. The Company is quoted on the Australian Stock Exchange (ASX: FTE) and AIM market of the London Stock Exchange (AIM: FTE). For more information, visit www.forteenergy.com.au

Note:

The information in this report that relates to the reporting of Mineral Resources is based on information compiled by Mr. Galen White, who is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM). Mr White is the Principal Geologist of CSA Global (UK) Ltd. CSA Global have an on-going role as geological consultants to Forte Energy NL. Mr. White has sufficient experience which 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 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. White consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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

FORTE ENERGY NL

ABN Quarter ended ("current quarter")

59 009 087 852 30 September 2013

Cash flows related to operating activities

1.1 Receipts from product sales and related debtors

1.2 Payments for (a) exploration and 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)

Net Operating Cash Flows

Consolidated statement of cash flows

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

Aggregate amount of payments to the parties included in item 1.2 53

Aggregate amount of loans to the parties included in item 1.10 0

Explanation necessary for an understanding of the transactions

Salaries and rental of office premises

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

Nil

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

Nil

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities

3.2 Credit standby arrangements

See also Note 6 for details of Discretionary Equity Financing Facility

Estimated cash outflows for next quarter

4.1 Exploration and evaluation

4.2 Development

4.3 Production

4.4 Administration

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.

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

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.

7.12 Unsecured notes

(totals only)

Compliance statement

1 This statement has been prepared under accounting policies, which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

2 This statement does give a true and fair view of the matters disclosed.

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.

6 Discretionary Equity Financing Facility On 15 February 2013 the Company announced that it had entered into a £10 million ($17 million) discretionary equity financing facility with Darwin Strategic Limited, a majority owned subsidiary of Henderson Global Investors' Volantis Capital. Forte Energy is under no obligation to make a draw down and may make drawdowns at its discretion. Further details of the facility are available in the Company's announcement of 15 February 2013. At the end of the quarter the Company has drawn down a total of approximately £587,000 ($893,000), leaving £9.4 million ($16 million) available to the Company under the facility.