QUARTERLY REPORT DECEMBER 2014

HIGHLIGHTS

YENEENA PROJECT - Paterson Province, WA

Millennium Zinc (Encounter 100%)

• Maiden Diamond drilling program intersected zinc sulphide mineralisation in all four holes, confirming new discovery.

• Intersection of 7m @ 4.8% zinc remains open along strike and at depth.

• Untested large scale geophysical anomaly located south of broad, low grade zinc sulphide intersections.

BM1-BM7 Copper/Cobalt Discovery (Antofagasta earning in)

• Final hole in 2014 program at BM7 intersected 140m @ 0.2% Cu, including 1.3m @ 3.2% Cu from 250.4m.

• Strong geochemical and structural vectors to direct follow up drilling at BM7.

• BM6 and BM7 East alteration and copper mineralisation are similar to hangingwall position at Nifty - deeper drilling required.

Lookout Rocks (Encounter 100%)

• Encounter purchases 100% interest in Lookout Rocks tenements from Hammer Metals.

• Structural and geological interpretation defines high priority targets.

• Successful EIS co-funded drilling grant received for up to $150,000

CORPORATE

• $2.1M cash balance as at 31 December 2014.

• Placement of 1,250,000 shares at 20c per share was completed to facilitate an escalation in drilling activities at the Millennium zinc prospect.

EXPLORATION

PATERSON PROVINCE

YENEENA COPPER / ZINC PROJECT

• 100% Encounter - E45/2500, E45/2501, E45/2502, E45/2503, E45/2561, E45/2657, E45/2806, E45/4230, E45/3768, E45/4091 and ELA45/4408

• Antofagasta earning into E45/2658 and E45/2805

• Encounter earning into E45/3232 and E45/3308 from St Barbara Ltd (SBM)