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1 ABN QUARTERLY ACTIVITIES REPORT MARCH 2013 SUMMARY Drilling to commence at Mayfield and Porters Mount The Company announced to the ASX on 23 April 2013 proposed drilling and exploration programs for the Mayfield and Porters Mount Projects. Capital Mining anticipates the drilling programs at Mayfield and Porters Mount will commence within approximately 4 months after the necessary departmental approvals have been granted. General Meeting Capital Mining announced to the ASX on 22 March 2013 a Notice of General Meeting of shareholders to be held on 6 May 2013 to approve the issue of Shares and Options to raise up to $2,000,000. The Company intends to use the funds raised by the issue of Shares with attaching Options for general working capital purposes, current and potential projects, business development purposes, acquisition of new projects and consultancy fees. Quarterly Activities Report March 2013 Page 1

2 ABN SOUTHEAST AUSTRALIA PROJECT LOCATION Mar 2013 MUNDAERNO uranium, copper, gold targets MILPARINKA precious metals, nickel targets PORTERS MT worldclass gold, copper potential NARRABURRA zirconium, REE MAYFIELD copper, gold, silver COWARRA gold CHAKOLA gold, base metals CRAIGIE alluvial gold MAYFIELD Gold, Base Metals (NSW) EL 6358 (CMY 51%; Forge 46.5%; Roberts Consulting 2.5%) Exploration Licence (EL) 6358 covers a significant goldcopper skarn deposit at the Mayfield Prospect where very encouraging historic exploration drilling results has been reported. The tenement is located in an exploration hotspot close to the worldclass Majors Creek gold field near Braidwood. The main focus of the work programme is to delineate a gold resource at the Mayfield goldcopper prospect and to explore the surrounding terrain for similar occurrences. Previous recent drilling at Mayfield boosted the resource, which is compliant with the JORC guidelines, to: Goldcopper dominant mineralization: 4.0 million tonnes at a grade of 0.4% copper, 0.7 g/t gold, 8.8 g/t silver, 0.2% zinc and 25.4% iron; and Zinc dominant mineralization: 0.9 million tonnes at a grade of 2.36% zinc, 5.9 g/t silver and 0.1% copper. The estimated contained metal content currently stands at approximately: 94,800 ounces of gold; 17,250 tonnes of copper; 1.3 million ounces of silver and 30,000 tonnes of zinc. As such, the current Quarterly Activities Report March 2013 Page 2

3 ABN drill results from the December 2011 January 2012 program have lifted the overall gold grade of the goldcopper dominant mineralisation by 14% and the estimated contained gold content by 23% from 77,000 oz to 94,800 ounces. At the Mayfield Prospect, the program calls for the completion of 3 inclined RC drill holes for a total of 860metres. The objective is to test the downdip and along strike extensions of the known mineralisation. Capital will have the availability of a portable XRF analyzer which will be of significant benefit in monitoring the progress of the drilling program. A limited program of auger drilling (between 200 and 400 holes) is proposed for the Limekilns area and is designed to test the subsurface soil profile in and around the recently completed drill holes by Capital. COWARRA Gold (NSW) EL 5939 (CMY 50%; Commissioners Gold 50%) Exploration is for gold in highgrade sulphidic veins and shoots within shear zones in strongly deformed metasedimentary rocks generally focused around the historic Cowarra gold mine. Commissioners Gold is the manager and can earn an additional 35% in the project by further exploration expenditure of $350,000. CHAKOLA Gold and Base Metals Project (NSW) EL 5697, MLA 269 (CMY 100%) Exploration at Chakola is for gold, silver, copper and other base metals. An environmental impact study was completed previously and additional information is required to support the proposed Harnett mine development application with the Cooma Monaro Shire Council. PORTERS MOUNT Gold, Copper, Molybdenum Project (NSW) EL 6591 (CMY 100%) Exploration is in a porphyry coppergold province close to a worldclass producing gold mine. The targets at Porters Mount are porphyry coppergold, subepithermal gold and skarn style deposits that are predicted to have formed in and around a large diatreme breccia and monzodiorite intrusive complex. Exploration of the system is to find a gold deposit suitable for a bulk mining operation. The main thrust of the upcoming exploration program is to auger drill +/ 1000 holes each to 1.0 metre deep and obtain a sample for hand held XRF analysis. The previous ionic leach soil sampling generated a number of metal anomalies but on a very coarse grid. The objective of the next stage of work would be to give definition and magnitude to what has already been identified. The availability of a small hydraulic auger rig will facilitate this program. NARRABURRA ZirconiumRare Metals Project (NSW) EL 5629; EL 6787 (CMY 100%) The Company is targeting a large, granite hosted, disseminated deposit of rare metals including zirconium, niobium, thorium, lithium and rare earth elements (REE) at Narraburra. CRAIGIE Alluvial Gold Project (NSW) MLA 366 (CMY 100%) The company is aiming to establish gold reserves for a small scale, low impact mining operation. The company has previously mined and processed auriferous gravel from two bulk sample excavations at the Shiralee Terrace 2 deposit. Positive results were obtained from these bulk samples. MLA 366 covers the Shiralee Deposit. Quarterly Activities Report March 2013 Page 3

4 ABN MILPARINKA Gold, Platinum, Nickel Project (NSW) EL 6832 (CMY 100%) The targets at Milparinka are for worldclass platinumnickel and goldcopper deposits that are predicted to be associated with a deeply buried intrusive complex. The terrain is covered with a blanket of thick postmineral sediments and drilling is the only definitive way to test the mineral potential in the project area. The company is aiming to generate evidence of any signs of intrusion related goldcopper mineralisation and associated hydrothermal alteration by recovering core samples from the basement rocks that overlie the inferred intrusive mass. MUNDAERNO SOUTH Uranium Project (SA) EL 3853 (CMY 51%; AMWD 49%) EL 3853 is located close to the Honeymoon uranium mine in the highly prospective Curnamona geological province of South Australia and is being explored for calcrete and sandstone hosted uranium deposits and for iron oxide bearing coppergolduraniumree deposits. Capital is the manager of the project in joint venture with Australian Mineral and Waterwell Drilling Pty Ltd (AMWD). Capital Mining is assessing its options regarding all other projects within its portfolio including further joint venture partnerships, sales and divestment of some of its current assets. It should be noted that the Chakola gold and base metals project remains a core asset of the Company. Capital Mining Limited ACN Robert J McCauley Executive Chairman and Managing Director Tel: Fax: Unit 4, 20 Rivett Place, Rivett Australia Mobile: +61 (0) Web: Statements contained in this report relating to exploration results and mineral resources are based on information compiled by Mart Rampe, who is a Member of the Australasian Institute of Mining and Metallurgy and is an independent consultant geologist engaged by Capital Mining. He has sufficient relevant experience in relation to the mineralisation styles being reported on, to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (JORC Code).Mart Rampe consents to the use of applicable information in this report in the form and context in which it appears. Quarterly Activities Report March 2013 Page 4

5 Rule 5.3 Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10. Name of entity Capital Mining Limited ABN Quarter ended ( current ) March 2013 Consolidated statement of cash flows Current Year to date Cash flows related to operating activities (9 months) 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration (68) (260) 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 tenement security deposits 1.8 Other Exploration JV management fees 1.9 Other income (186) (727) Net Operating Cash Flows (328) (913) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (332) (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 (248) 1.13 Total operating and investing cash flows (carried forward) (328) (1,161) 84 30/9/2001 Page 1

6 1.13 Total operating and investing cash flows (brought forward) (328) (1,161) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings Repayment of borrowings 1.18 Dividends paid 1.19 Other share issue costs (3) Net financing cash flows 309 1,054 Net increase (decrease) in cash held (19) (107) 1.20 Cash at beginning of /year to date Exchange rate adjustments to item Cash at end of 4 4 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 $A' Aggregate amount of payments to the parties included in item Aggregate amount of loans to the parties included in item Explanation necessary for an understanding of the transactions 1.23 Directors fees, Consulting fees and reimbursement of expenses paid to entities associated with Directors Noncash 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 Page 2 30/9/2001

7 Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used 3.1 Loan facilities 3.2 Credit standby arrangements Estimated cash outflows for next 4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration Total 180 Reconciliation of cash Reconciliation of cash at the end of the (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current Previous 5.1 Cash on hand and at bank Deposits at call 5.3 Bank overdraft 5.4 Other (provide details) Total: cash at end of (item 1.22) 4 23 Changes in interests in mining tenements 6.1 Interests in mining tenements relinquished, reduced or lapsed Tenement reference Nature of interest (note (2)) Interest at beginning of ELA 4285 Application only Nil Nil Interest at end of 6.2 Interests in mining tenements acquired or increased Nil 30/9/2001 Page 3

8 Issued and quoted securities at end of current 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) 7.1 Preference + securities (description) 7.2 Changes during (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions Ordinary securities 291,946, ,946,044 Amount paid up per security (see note 3) (cents) 7.4 Changes during (a) Increases through issues (b) Decreases through returns of capital, buybacks Convertible debt securities (description) 7.6 Changes during (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options (description and conversion factor) 117,986,525 3,000,000 2,000,000 1,500,000 34,000,000 34,000, ,986,525 Exercise price 2 cents 4 cents 6 cents 8 cents Expiry date 31 December Sep Sep Sep Issued during 39,193,670 39,193,670 Exercise price 2 cents Expiry date 31 December Exercised during 7.10 Expired during 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) Page 4 30/9/2001

9 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. Sign here: Print name: Date: 30 April 2013 (Director/Company Secretary) Elizabeth Hunt Notes 1 The ly report provides a basis for informing the market how the entity s activities have been financed for the past 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 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. == == == == == 30/9/2001 Page 5