June 2015 Quarterly Report

27th July 2015

Receipts from the Mt Garnet royalty interest more than offset the short term adverse effects of industrial action on the Weeks Royalty in Bass Strait.

KEY POINTS

A payment of $146,782 was received under the Mt Garnet royalty interest for sales relating to production in the March quarter. The operator expects sales from production under this royalty to continue into 2016.

Industrial action in Bass Strait caused a substantial decline in petroleum production during the reporting period, reducing the Weeks Petroleum Royalty. A payment of only

$66,356 was received during the quarter compared with $139,525 in the prior period.

This payment decline is regarded as a "one off" as production levels appear to have resumed at more normalised rates, based on recent reports.

CORPORATE DETAILS ASX Code: RCO Issued Capital: 52,714,183 shares

Share Price: 21 cents

Market Capitalisation: $11.1 million

Cash/Liquids: $3.8 million

Major Shareholders

Directors 19.43% Noontide 12.79% High Peak 19.99% Acorn 14.89%

Directors

Peter Topham Executive Chairman David Ogg Director Bruce Pertzel Director Piers Reynolds Director

The company's strategy is to expand a core royalty portfolio of income-producing base metals, precious metals and energy interests. This may be achieved by direct acquisition, exploration initiatives, or as a result of mezzanine/project financing activities. In addition, successful exploration activities will be maximised to the benefit of shareholders in whatever corporate format deemed appropriate.

Royalty Interests

Royalco owns a 1% interest in the Weeks Petroleum Royalty (the equivalent of a 0.025%
over-riding royalty from the entire hydrocarbon production of the main Bass Strait fields).
Income received during the quarter was $66,358, representing payment for the three months ending 31 March 2015.
Allowing for seasonal factors and the decline in petroleum prices, anticipated income would have been in the range of $135,000 to $155,000 if not for the unforeseen industrial action. It is our understanding that more usual production rates resumed during the most recent quarter.
The BHP Billiton Operational Report, issued to the ASX on 22 July 2015, said Bass Strait production for the period ending 30 June was 47.7% higher than for the March quarter in terms of crude oil and condensate and 74.3% higher for natural gas. This improvement should increase RCO's royalty income during the current quarter.
No results have been announced to date from the ongoing drilling program covering the
Turrum oil and gas field.
At Mt Garnet in far north Queensland, the operator, Consolidated Tin Mines Limited (ASX Code: CSD), has made a royalty payment of $146,782. This follows a payment of $144,555 made in the previous period.
Based on recent favourable announcements by the operator to the ASX and on direct discussions held with the company, royalty income is expected to continue through the first half of 2016.
OceanaGold (ASX Code: OGC), operator of the Blackwater Project at Reefton in New Zealand, has yet to make a decision to advance the project. However it was noted that, in a company interview lodged with the ASX on 8 April, the managing director commented: "We expect some positive news from New Zealand at Macraes, from exploration and project development at Round Hill and Blackwater."
No activities of substance have been reported during the quarter on the other royalty interests held.

Exploration

The rationale for Royalco's exploration initiatives is to generate royalties and free-carried interests in a portfolio of projects. It is not necessarily the company's intention to be the operator of any mining project. Third parties would most likely be introduced to develop any discovery made.
Management time continues to be focused on completing studies which reflect:
a) a strong bias in favour of base and precious metals,
b) projects located in resource development-"friendly" regions,
c) projects at an advanced stage of identifying acceptable commercial potential, and
d) projects that possess a readily identifiable exit strategy, i.e. sale for capital profit and/or royalty creation.
A number of potential projects have been identified in southern Europe with negotiations now at a preliminary stage on one particular project area.
As previously advised, exploration activities in the Philippines have ceased with the remaining tenements now subject to a royalty with a private concern.

Corporate

The cash balance at the end of June was $3.8 million - the same balance as for the previous quarter.
Numerous investment possibilities continue to arise associated with the current weakness in commodity prices and consequent equity availability. Unrealistic attitudes by vendors, coupled with fragile project economics, unfortunately still clutter the resources sector and our Board remains somewhat risk-averse when considering these "opportunities".

Peter J Topham
Executive Chairman

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Appendix 5B

Rule 5.5

Mining exploration entity and oil and gas 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, 01/05/2013

Name of entity

Royalco Resources Limited

ABN Quarter ended ("current quarter")

53 096 321 532 June, 2015

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) 1

Net Operating Cash Flows

* Royalties received

1 Research & Development claim net proceeds

+ See chapter 19 for defined terms.

01/05/2010 Appendix 5B Page 1

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Payments to directors of the entity, associates of the directors, 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 1.2 115

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

1.25 Explanation necessary for an understanding of the transactions

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

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

+ See chapter 19 for defined terms.

Appendix 5B Page 2 01/05/2013

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities

3.2 Credit standby arrangements

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.

+ See chapter 19 for defined terms.

01/05/2010 Appendix 5B Page 3

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Changes in interests in mining tenements and petroleum tenements

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements and petroleum 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.

7.5 +Convertible debt securities (description)

+ See chapter 19 for defined terms.

Appendix 5B Page 4 01/05/2013

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

7.6 Changes during quarter

(a) Increases through issues (b) Decreases through securities matured, converted

7.12 Unsecured notes (totals only)

Pursuant to Listing Rule 5.3.3 a schedule of Company tenements and interests therein is provided as follows:

Tenement Status for Quarter ending 30 June 2015

+ See chapter 19 for defined terms.

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Appendix 5B

Mining exploration entity and oil and gas 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 5).

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

27 July, 2015

Sign here: ............................................................ Date: ............................ (Company Secretary)

Print name: Nick Boicos .................................................

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 and petroleum 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 or petroleum 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.

== == == == ==

+ See chapter 19 for defined terms.

Appendix 5B Page 6 01/05/2013