Mineral Hill Mine, NSW

HIGHLIGHTS Mineral Hill Mine, NSW PRODUCTION: September 213 was recorded as the best gold production month for KBL since the commencement of operations with 789 ounces of gold in copper concentrate produced, beating the previous record of 573 ounces set in July 213. Consistent operational performance for the quarter and reduced costs delivered a positive operating cash flow for each month in the quarter. Restructured manning and reduced costs: o Manpower has been reduced from 115 in January to 65 or 43.5% at the end of the quarter. C1 costs have reduced from $2.7/lb copper after gold and silver credits in the March 213 quarter to $1.33/lb copper after gold and silver credits in the current quarter, this equates to a 5.7% improvement over the period of restructured manning and the cost reduction program. Low cost Copper (Cu) production: o 948 tonnes (t) of Cu in concentrate produced, at a reduced C1 cost Gold (Au) production up 81% on last quarter: o Record 1,671 ounces (oz) of Au in concentrate produced Cu recoveries up and remain in steady state: o Steady state operations see the average copper and gold recoveries increased to 94% and 74% respectively for the September quarter SALES: Three shipments of 4,18 dry metric tonnes (DMT) of Cu concentrates STRATEGIC PRODUCTION PLAN: Redevelop the SOZ (Southern Ore Zone) and ESOZ (Eastern Southern Ore Zone) copper-gold deposits. Current resources are expected to provide 3 years of ore supply. Construct a new CIL plant by the September 214 quarter. The CIL plant feed is expected to be supplied from the SOZ, ESOZ and Pearse deposits. Commence mining in the Pearse deposit, accessing oxide ore in mid-214. P a g e 1

EXPLORATION: Exploration for new Cu Au resources continued at Mineral Hill. SOZ/ESOZ Resource Infill & Extension Program o A surface and underground drilling program has been designed to test strike and depth extensions of the SOZ and ESOZ Cu Au lodes that commenced at the end of the September 213 quarter. o Program designed to secure 3 years of reserve and test depth extensions of resources which are currently open. o Metallurgical test work completed in ESOZ hole KUSOZ1: Significant intersections include 26m @.9% Cu & 3.6g/t Au and 1m @ 2.2% Cu & 6.6g/t Au Test work indicates copper recoveries of 92 97% copper and gold recoveries of 6% are achievable with current plant configuration Cyanide leach tests indicate combined float/cil gold recoveries of greater than 85% possible Parkers Hill Underground drilling o Diamond drilling in August at Parkers Hill Northeast established grade continuity and ore quality of Cu Pb Zn Ag mineralisation and encountered anomalous gold. Future surface drilling is planned to test the potential size of the ore body which is open to the north and northeast. o Significant intersections include: 1.4m @ 2.2% Cu, 33g/t Ag &.6g/t Au from 67.15m (in hole KUPH95); and 7.4m @ 2.4% Cu, 19g/t Ag & 3.3g/t Au from 48.9m (in hole KUPH96). Sorby Hills Silver-Lead Project, WA APPROVALS: The Western Australian Environmental Protection Authority (EPA) has, subject to there being no appeals, forwarded recommendations to the Minister for approval. The Joint Venturers are working to progress the feasibility study and operational licences in preparation for project financing, construction and operations. Corporate $1.7 million cash in bank, combined with concentrate and ore stocks of $2.1 million $3.1 million net Share Purchase Plan funds received Repayment of the principal and interest of a US$3 million loan established in June 213 Payment of remaining $1.4 million to Triako Resources on account of Mineral Hill purchase Reduction in trade payables from $6.8 million to $2.8 million Payment of Convertible Note interest of $.5 million Increase in trade receivables of $.7 million P a g e 2

MINERAL HILL MINE, NEW SOUTH WALES (KBL 1%) Mill and Mine Performance Mineral Hill Performance Quarter to Sep-13 Jun-13 Mar-13 Dec-12 Sep-12 Ore Mined t 66,379 78,28 7,597 72,57 63,18 Development metres m 79 368 255 352 369 Ore Treated t 62,596 8,141 71,865 71,228 63,32 Cu Grade % 1.61 1.72 1.69 1.6 2.24 Recovery % 94.4 89.9 91.4 72.4 75.9 Concentrate Production DMT 4,91 5,345 4,98 4,556 4,598 Cu Grade % 23.17 23.43 22.69 18.91 23.39 Au Grade g/t 12.7 5.37 4.13 2.49 2.88 Ag Grade g/t 3 42 71 187 375 Contained Metal Cu t 948 1,252 1,114 861 1,75 Au Oz 1,671 923 652 364 426 Ag Oz 3,959 7,166 11,166 27,444 55,382 Table 1: Mineral Hill Mine and Mill Performance Site restructuring was completed in July 213 and has realised significant performance improvements at the Mineral Hill mine site. The September quarter saw copper production in line with set forecasts while gold production was above expectations. Compared to the previous quarter, gold (Au) in copper concentrate production was up 81%. As the operations continued in a steady state, copper recoveries were increased in comparison to the previous quarter, averaging 95%, while gold recovery was further optimised giving a significant increase from 53% to 74%. In the September quarter, 1% of production ore was sourced from the Red Terror lodes, located beneath and adjacent to the Parkers Hill ore body. Over the quarter, mining accessed the copper/higher gold Central and Northern Lodes within the Red terror system, which resulted in the elevated gold recovery and product. Cost reductions and manning/management changes implemented over the last five months have delivered operational improvements. To date the production costs (C1) have reduced from $2.7/lb copper after gold and silver credits for the March quarter to $1.33/lb copper after gold and silver credits for the September quarter. P a g e 3

Mineral Hill - Strategic Production Plan The immediate plans for Mineral Hill involve the extraction of the remainder of Red Terror lodes during the December 213 quarter and the completion of access and planning for production in the Southern Lodes. The Strategic Production Plan for Mineral Hill involves the following: Redevelop the SOZ (Southern Ore Zone) and ESOZ (Eastern Southern Ore Zone) Cu/Au deposits. Current resources are expected to provide 3 years of ore supply. Construct a new CIL plant by the September 214 quarter. The CIL plant feed is expected to be supplied from the SOZ, ESOZ and Pearse deposits. Commence mining in the Pearse deposit. Accessing oxide ore in mid-214. The SOZ and ESOZ ore deposits are gold-copper and copper-gold lodes in the southern portion of the mine. Both deposits have existing underground decline access and are approximately 2 to 35 metres from surface. The pre-existing 7m southern access drive has now been dewatered, cleared and rehabilitated, providing access to these two lodes. A capital plan of $2m to access ore from SOZ, has been committed and is well underway. Activities include the dewatering of the SOZ decline, geotechnical assessment of existing development drives and rehabilitation where required, the reinstatement of power/ventilation/services and the installation of ore level development. This compares favourably to developing new access to the Southern Ore Zones, with an estimated cost of $8.1m. Underground drilling has commenced for detailed definition of the current SOZ mineable resources. Initial drilling is designed to establish access and ore extraction from the upper levels of SOZ in late 213. Further definition drilling from surface and underground will be on-going in both SOZ and ESOZ. Design reviews of the CIL plant are well advanced with construction drawings being prepared in readiness for tenders. Staged open pit designs and mining sequences for the Pearse gold-silver deposit have been developed with access to oxide ore by mid-214. The installation of a CIL by mid to late 214 coincides with the Pearse ore supply and is in line with current production strategies. Drilling is planned in the coming months to further define Resources and Reserves at Pearse North as a potential addition to the Pearse ore supply. P a g e 4

Mineral Hill Exploration Southern Deposits C and G Lode targets G Lode and C Lode North are high priority resource extension and exploration targets in the southern part of the Mineral Hill mine. Three diamond drill holes, comprising a parent hole and two wedges (Figure 1), are proposed to be drilled in the December Quarter 213 targeting extensions of known SOZ mineralisation at depth and along strike to the south. G Lode is the southernmost and highest tonnage ore lens of the current ESOZ resource. A conceptual G Lode South Target1 (Figure 1) of an additional 8, to 1, tonnes potentially grading at.8-1.2% copper and 2.5 4g/t Au has been defined based on historical drilling. This exploration target will be tested by the proposed drilling between -6 and 2RL. C Lode North occurs to the east of, and directly beneath the existing SOZ decline, and is almost entirely below the lowest development level at SOZ (4RL). Based on historical drilling, a conceptual C Lode North Target has been constructed (Figure 1), potentially containing between 2, and 3, tonnes, grading 2. 2.5% copper and 2.5 3.5g/t gold. This target will be tested between -4 and -1RL. The upper part of C Lode North (-4 to 4RL) is planned to be drilled from underground locations as part of the main SOZ/ESOZ resource/reserve drill-out commencing in October 213. Figure 1. Oblique view showing the proposed Southern Ore Zone drill holes 1 The potential quantity and grade of these targets is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in determination of a Mineral Resource. P a g e 5

Parkers Hill Northeast Lodes The Parkers Hill mineralisation is open to the northeast and is a high-priority exploration target. Three underground HQ diameter diamond holes were completed during August 213 from the Parkers Hill 117NE access level and returned the significant assay results presented in Table 2. The drilling has increased confidence in grade continuity and ore quality at Parkers Hill Northeast and it is proposed to further test the strike extent of the mineralisation with surface drilling. All three underground drill holes encountered intervals of elevated gold which is not typically associated with the Parkers Hill deposit to the southwest (but is present in the Red Terror lodes), making this target even more attractive. Hole Interval (m) Cu % Pb % Zn % Ag g/t Au g/t From (m) KUPH95 1.4 2.2 2.3.6 33.6 67.15 includes 3.5 5.7 5.1.3 97.1 74.6 6.4.6 4.88 3.75 16.2 3. 83 KUPH96 7.4 2.4.5.9 19 3.3 48.9 includes 1.5 4.9.3 1.5 42 13.5 54 4.5 1.2 3.9 2.8 18.3 56.5 6.6.9 3.1 2.7 18.6 64.9 2.1 1.3 3.7.9 25.6 84 KUPH97 3.25 3.2.8.7 11 2.9 6.1 6.24 1.1 3.6 4.4 15.7 66.86 1.1.5 2.1 2.2 13.2.8 73.2 Table 2: Significant intersections from recent drilling targeting the Parkers Hill Northeast lodes. P a g e 6

Figure 2: ESE-WNW section (looking north) illustrating the Parkers Hill Northeast Lodes as intersected by underground drilling. Numerous historical intersections are also recorded (Refer to Table 2 for significant recent results). P a g e 7

SORBY HILLS, WESTERN AUSTRALIA (KBL 75%) Approvals The Western Australian Environmental Protection Authority (EPA) has recommended, subject to there being no appeals, that the Minister for Environment approve the development for the Sorby Hills Silver-Lead Zinc Project near Kununurra in the East Kimberley Region of Western Australia. The EPA report and recommendations to the Minister (dated 16 October 213) outlines the conditions for development and operation of the project. A copy of this report is available on the Company s website at www.kblmining.com.au Sorby Hills is a silver-lead (Ag-Pb) project located 5km by sealed road, north-east of the Kimberley regional centre of Kununurra in Western Australia. The project is based on a major undeveloped, near-surface Ag-Pb deposit which has been well defined by extensive exploration. KBL owns 75% of the Sorby Hills project and is the Joint Venture Manager. KBL has completed a Pre-Feasibility Study for Stage 1 of the Sorby Hills project, based on a conventional open cut mine and sulphide flotation concentrator operation, which generates very robust financial returns. The project has well established infrastructure with sealed road access to the regional centre of Kununurra (5 km) and established port facilities at Wyndham (16 km). From this information, a Public Environmental Review document was submitted and assessed. The Joint Venture is working to progress the feasibility study and operational licences in preparation for project financing, construction and operations. Current timing expectations see the construction phase scheduled for mid- 214 with operations approximately 12 months later. A 3D fly-through is now available on the Company s website and provides an overview of the project s setting, infrastructure, ore deposits and planned development. Click here for Sorby Hills 3D Fly-through P a g e 8

CORPORATE On 2 July 213, the Company announced a Share Purchase Plan ( SPP ) designed to provide additional working capital. On 5 August 213 the Company announced that 8,79,143 shares had been issued in relation to the SPP at a price of 3.76 cents per share, the shortfall of 19,92,857 shares were placed at the same price on 29 August 213. The amount raised by the SPP after costs was $3.1 million. On 15 July 213, the Company announced that its $14.9 million R&D claim was being paid; the funds were received and banked on 16 July 213. Proceeds of the SPP and R&D claim have been used to repay a US$3 million debt facility, pay the final amount owing to Triako of $1.4 million in relation to the acquisition of the Mineral Hill mine and reduce trade payables by $4 million. The reduction in trade payables has enabled the Company to make significant cost savings. At 3 September 213, cash at bank was $1.7 million plus approximately $2.1 million in copper concentrate and ore inventory and trade receivables of $2.3 million. During the quarter, actual receipts less production costs showed a deficit of $4.2 million; this was mainly due to the reduction in trade payables of $4 million, the increase in inventory of $1.4 million and an increase in trade receivables of $.7 million. There would have been a surplus of $1.9 million for the quarter in the absence of the foregoing adjustments; this is in line with our notional profit. Operations at Mineral Hill made a notional profit for the quarter of $2.2 million (excluding capex) based on actual production, actual costs on an accruals basis (not cash) and average metal prices and exchange rates for the quarter. During the quarter, the Company s wholly owned subsidiary, KBL Sorby Hills Pty Ltd, became the holder of the 75% interest in the Sorby Hills mining leases formally held by KBL Mining Limited. The Company s 213 Annual General Meeting is to be held on 13 November 213. Appendix 5B is attached. P a g e 9

For further information, please contact: Anthony (Trangie) Johnston Chief Executive Officer KBL Mining Limited Ph: +61 2 9927 2 About KBL Mining KBL Mining is an Australian resource company listed on the ASX (KBL and KBLGA) with a focus on precious and base metals. KBL s main assets include the Mineral Hill copper-gold-silver-lead-zinc project near Condobolin in New South Wales and Sorby Hills lead-silver-zinc deposit in Western Australia. The Company is now operating the refurbished processing plant at Mineral Hill to produce copper concentrates and, increasingly, copper gold concentrates and is planning the Pearse open cut gold-silver mine at Mineral Hill. Sorby Hills (KBL holds 75% with Henan Yuguang Gold & Lead Co. Ltd (HYG&L) holding 25%) is one of the world s largest near surface undeveloped silver-lead deposits, close to port infrastructure and a short distance from Asian markets. More information can be found on KBL s website at www.kblmining.com.au. Competent Persons Statement The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Anthony Johnston, MSc (Hons), who is a Member of the Australasian Institute of Mining and Metallurgy and is a full-time employee of the Company. Anthony Johnston 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 24 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears. P a g e 1

Appendix 5B Mining exploration entity quarterly report Appendix 5B Rule 5.3 Mining exploration entity quarterly report Introduced 1/7/96 Origin Appendix 8 Amended 1/7/97, 1/7/98, 3/9/1, 1/6/1, 17/12/1 Name of entity KBL Mining Limited ABN Quarter ended ( current quarter ) 38 129 954 365 3 September 213 Consolidated statement of cash flows Cash flows related to operating activities Current quarter $A Year to date (3months) $A 1.1 Receipts from product sales and related debtors 6,125 6,125 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration (888) (1,447) (1,347) (592) (888) (1,447) (1,347) (592) 1.3 Dividends received 1.4 Interest and other items of a similar nature 32 32 received 1.5 Interest and other costs of finance paid (579) (579) 1.6 Income tax 1.7 Other (R&D refund) 14,93 14,93 Net Operating Cash Flows 7,27 7,27 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 (145) (c) other fixed assets 1.1 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) (145) Net investing cash flows (145) (145) 1.13 Total operating and investing cash flows (carried forward) 7,62 7,62 + See chapter 19 for defined terms. 17/12/21 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report 1.13 Total operating and investing cash flows (brought forward) 7,62 7,62 Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 3,13 3,13 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings (4,725) (4,725) 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows (1,622) (1,622) Net increase (decrease) in cash held 5,44 5,44 1.2 Cash at beginning of quarter/year to date 5,35 5,35 1.21 Exchange rate adjustments to item 1.2 1.22 Cash at end of quarter 1,745 1,745 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' 1.23 Aggregate amount of payments to the parties included in item 1.2 65 1.24 Aggregate amount of loans to the parties included in item 1.1 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 Financing facilities available Add notes as necessary for an understanding of the position. Amount available Amount used $A $A 3.1 Loan facilities 1, 5 3.2 Credit standby arrangements + See chapter 19 for defined terms. Appendix 5B Page 2 17/12/21

Appendix 5B Mining exploration entity quarterly report Estimated cash outflows for next quarter $A 4.1 Exploration and evaluation (925) 4.2 Development (2,77) 4.3 Production (net after cash receipts) 5,78 4.4 Administration (6) Total 783 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. Current quarter $A 5.1 Cash on hand and at bank 743 5,33 5.2 Deposits at call 1, 5.3 Bank overdraft Previous quarter $A 5.4 Other (provide details) This now accounts for the Company s 75% interest in the cash held by the Sorby Hills Joint Venture 2 2 Total: cash at end of quarter (item 1.22) 1,745 5,33 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 Tenement reference Nil Nil Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter + See chapter 19 for defined terms. 17/12/21 Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report 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. 7.1 Preference + securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks, redemptions 7.3 + Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buybacks 7.5 + Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter Total number Number quoted Issue price per security (see note 3) (cents) 393,535,629 393,535,629 8,79,143 19,92,857 28,954,516 1%pa convertible notes (KBLGA) quarterly conversions on the basis of 1 share for each note maturing 5 August 216 1,65, 2,8, 44,, 8,79,143 19,92,857 3.76 cents per share 3.76 cents per share Exercise price $.2 $.3334 $.11 Amount paid up per security (see note 3) (cents) 3.76 cents per share 3.76 cents per share Expiry date 2/7/15 3/5/15 14/3/2 + See chapter 19 for defined terms. Appendix 5B Page 4 17/12/21

Appendix 5B Mining exploration entity quarterly report 7.1 Expired during quarter 5, 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) Compliance statement Exercise price $.42 Expiry date 27/8/13 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. Sign here: Date: 3 October 213 (Director/Company secretary) Print name: Stephen Lonergan 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 6: Exploration for and Evaluation of Mineral Resources and AASB 17: 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. 17/12/21 Appendix 5B Page 5 == == == == ==