www.kentorgold.com.au Quarterly Activities Report Period Ended 31 March 2013 Corporate Administrators appointed to the subsidiary company operating the Murchison gold mine after a finance facility to fund the mine s ongoing operations was not approved Administration to give time to consider funding options shares remain in suspension. Kentor is seeking to sell one or more of its assets to raise funds to support the group s operations. Murchison Gold Mine, WA Successful exploration drilling extended areas of high grade mineralisation Production increased during quarter From April 19, the Administrators suspended mining and continued processing of stockpiled ore Jervois CopperSilverGold Project, NT Metallurgical test work continuing for the bankable feasibility study Andash GoldCopper Project, Kyrgyz Republic Communication with local community aimed at final development approval Overview During the quarter, the directors of Kentor Minerals (WA) Pty Ltd appointed Peter McCluskey, Tim Michael and Darren Weaver of Ferrier Hodgson as Administrators of Kentor Minerals (WA) Pty Ltd which operates the Murchison Gold Mine in Western Australia. Kentor Minerals (WA) Pty Ltd is a wholly owned subsidiary of ( Kentor Gold or the Company ). The administrators were appointed after Kentor Gold was unsuccessful in obtaining final approval for a finance facility that was necessary for Kentor Gold to continue to fund the ongoing operations of the Murchison Project. The appointment was made to give administrators and the board time to consider and evaluate additional finance opportunities. The voluntary administration does not apply to Kentor Gold or the subsidiary companies that hold the Andash or Jervois projects. Shares in Kentor Gold remain in suspension until additional funds are raised and the administration of KMWA is concluded. Operationally, production from the Murchison mine and through the processing plant continued to ramp up. Successful drilling results extended the areas of high grade mineralisation at Murchison, enabling further upgrades in the gold Resources to be planned. The Company continued with a bankable feasibility study into the Jervois CopperSilverGold Project in the Northern Territory. In the Kyrgyz Republic, where final approval is being sought for the development of the Andash GoldCopper Project, priority was given to a program of communication with the local community 1 May 2013 Page 1 of 5
www.kentorgold.com.au Australia Murchison Gold Mine, WA (Kentor Gold 100%) Production at the Murchison Gold Mine increased progressively month on month during the quarter. The production was increasing month on month as the head grade increased due to the increasing proportion of the mill feed that was being sourced from underground. In April the operation was forecast to produce in excess of 2,000 oz however both open pit and undergroud mining operations were suspended at the request of the administrators due to the underperformance of the operations and the falling gold price. Processing of stock piled ore is forecast to continue to the end of the month. Although the quantity of gold produced was increasing, the operations took longer than planned to ramp up to a sustainable basis and consequently consumed more cash than planned. The poor performance of the initial mining contractor meant that the open pit mining was behind schedule resulting in lower grades than originally planned. The new mining contractor was performing well and had substantially increased production and reduced costs.. Other factors contributing to the underperformance of the operations during the quarter include the harder than expected ore from the Lewis pit which resulted in restricted mill throughput and higher dilution due to the high powder factors required to get adequate fragmentation during blasting operations. At the date of suspension of the mining operations, the Lewis open pit had approximately one month of mining left to complete. This pit was then planned to be used to store the tailings from the project. At the completion of mining of the Lewis pit, ore production from the Alliance pit was scheduled to commence. The ore from the Alliance pit is much softer (Bond Work Index 10 versus 20) and higher grade than ore from the Lewis pit. This was forecast to increase mill throughput and increase gold production going forward. 1 May 2013 Page 2 of 5
www.kentorgold.com.au During the quarter, the Company announced the successful results of drilling programs aimed at extending the known high grade mineralisation at the NOA7/8 deposit and defining additional resources at the NOA2 deposit. All six RC holes drilled on the periphery of the NOA7/8 ore body intersected significant mineralisation. The results successfully extended the high grade mineralisation which remains open to the south and the north along strike and down dip. Additionally, a new shallow mineralised zone was identified to the north beneath the NOA8 pit. These latest results highlight the potential to further increase high grade Resources at NOA 7/8. At the NOA2 deposit, where underground mining produced high grade ore for the processing plant during the quarter, a new high grade zone of mineralisation was discovered. The Company reported that one of the three RC holes drilled late in 2012 intersected a narrow high grade zone, the hole grading up to 149 g/t gold. The drilling followed up a significant intersection from previous drilling in April 2012. The new zone is between two previously known lodes and is not part of the existing Resource at NOA2. During February 2013, an RC drilling program of 10 holes was completed at NOA1 to test the potential for a resource extension below the existing open pit. The results of the program, announced on 4 April 2013, were very encouraging with nearly all holes encountering economic grades of mineralisation. The NOA1 deposit is interpreted to be the southern extension of the NOA2 deposit offset by approximately 200 metres by an eastwest trending fault. The recent drilling supports this interpretation. The NOA1 mineralisation remains open to the south and at depth, and has the potential for underground mining development accessed from the NOA2 underground mine. Jervois CopperSilverGold Project, NT (Kentor Gold 100%) Coppersilver: Inferred Resource of 13.5 million tonnes @ 1.3% copper and 25.8 g/t silver for a total of 170,416 tonnes copper and 11.6 million oz silver at a 0.5% copper cutoff. Gold: Initial gold Inferred Resource of 12.5 million tonnes @ 0.17 g/t gold for 69,000 oz gold at a 0.5% copper cutoff. Leadzinc: Resource includes 1 million tonnes @ 2.6% lead and 2.2% zinc for 26,000 tonnes lead and 22,000 tonnes zinc contained within the copper mineralisation at the Green Parrot and Bellbird North deposits. Metallurgical test work required for the bankable feasibility study of the Jervois CopperSilver Gold project advanced during the quarter. 1 May 2013 Page 3 of 5
www.kentorgold.com.au Kyrgyz Republic Andash GoldCopper Project (Kentor Gold 80%) During the quarter, the Company worked with local, regional and national government officials to communicate to local people the favourable findings of an international environmental audit ordered by the Kyrgyz Government. Andash is a very low cost project planned to produce 70,000 oz gold and 7,400 tonnes copper a year for an initial six years of mine life. Bashkol Exploration Licence (Kentor Gold 80%) After an encouraging 2012 exploration program that confirmed extensive high grade gold mineralisation at Bashkol, the winter period was spent planning the 2013 program. Included is a proposed drilling campaign at the Bekbulaktor GoldCopper Prospect following confirmatory infill channel sampling last year. Prospective areas along the 12km long mineralised horizon from Bekbulaktor to Sharkratma were identified last year for further work in 2013. Geothermal energy Solomon Islands Joint venture partners Geodynamics Limited announced on 10 April that initial exploration studies have confirmed the presence of a high quality geothermal exploration prospect at the Savo Island Prospect in the Solomon Islands. A resource has been estimated to be capable of supporting more than 30 MWe of generating capacity for 30 years, sufficient to supply 100% of the current power requirement of the city of Honiara and the nearby Gold Ridge Mine. In November 2012, Kentor Gold entered into an agreement for Geodynamics Limited to acquire from Kentor Gold up to a 70% interest in two stages in Kentor Gold s Savo Island Geothermal Project for a total expenditure of $5 million. Having completed and funded the first stage, Geodynamics has taken a 25% interest in the joint venture along with the operatorship of the project. A feasibility study into the development is now being undertaken. Corporate At the end of March, the company had a cash balance of $2.2m. 1 May 2013 Page 4 of 5
www.kentorgold.com.au Outlook The Administrators and the Board of Kentor Minerals (WA) Pty Ltd will consider finance opportunities for the Murchison Mine during the current period of administration. Work on the bankable feasibility study for Jervois will continue. In the Kyrgyz Republic, the Company will pursue final approval for the development of Andash by working with the local community. Kentor Gold is also actively seeking to sell one or more of its assets to raise cash to fund the groups ongoing operations. For further information contact: Mr Simon Milroy Managing Director Phone: (07) 3071 9003 1 May 2013 Page 5 of 5
Mining exploration entity quarterly report Rule 5.3 Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001. Name of entity ABN Quarter ended ( current quarter ) 52 082 658 080 31 March 2013 Consolidated statement of cash flows Cash flows related to operating activities Current Quarter Year to date (3 months) 1.1 Receipts from product sales and related debtors 5,036 5,036 1.2 Payments for (a)exploration and evaluation (b) development (c) production* (d) administration (845) (1,933) (7,559) (746) (845) (1,933) (7,559) (746) 1.3 Dividends received 1.4 Interest and other items of a similar nature received 29 29 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Foreign Exchange differences Net Operating Cash Flows (6,018) (6,018) Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) purchase options (c) other fixed assets 1.9 Proceeds from sale of: (a)prospects (b)equity investments (114) (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 1.13 Total operating and investing cash flows (carried forward) *A portion of underground mine development costs have been allocated to production. (114) (114) (114) (6,132) (6,132) 30/04/2013 Page 1
Mining exploration entity quarterly 1.13 Total operating and investing cash flows (brought forward) (6,132) (6,132) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (Capital raising costs) Net financing cash flows Net increase (decrease) in cash held (6,132) (6,132) 1.20 Cash at beginning of quarter/year to date 8,333 8,333 1.21 Exchange rate adjustments to item 1.20 2 2 1.22 Cash at end of quarter 2,203 2,203 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 1.23 Aggregate amount of payments to the parties included in item 1.2 149 1.24 Aggregate amount of loans to the parties included in item 1.10 1.25 Explanation necessary for an understanding of the transactions Remuneration and expenses paid to executive and nonexecutive directors for the quarter. 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 30/04/2013
Mining exploration entity quarterly report 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 inflow/(outflow) for next quarter 4.1 Exploration and evaluation (158) 4.2 Investment/Development 4.3 Operations Revenue 4.31 Operations Costs 4.4 Admin (883) 4.5 Asset Disposal 15,000 4.6 Capital Raising (net of costs) (Corporate facility being negotiated) Total 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 13,959 Previous Quarter 5.1 Cash on hand and at bank 830 2,698 5.2 Deposits at call* 1,373 5,635 5.3 Bank overdraft 5.4 Other (provide details) Total: cash at end of quarter (item 1.22)** 2,203 8,333 *Deposits at call includes $1,373,500 provided as security against environmental bonds and bank guarantees. ** Includes funds retained by Kentor Minerals (WA) In Administration. 30/04/2013 Page 3
Mining exploration entity quarterly 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 quarter Interest at end of quarter 6.2 Interests in mining tenements acquired or increased E51/1562 E51/1553 Exploration licence 51/1652 applied for on 14/02/2003 Exploration licence 51/1553 applied for on 3/12/2012, ballot won on 20/02/2013 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 share consolidation 7.5 + Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted Total number Number quoted Issue price per security (see note 3) (cents) 140,040,563 Amount paid up per security (see note 3) (cents) Page 4 30/04/2013
Mining exploration entity quarterly report 7.7 Options (description and conversion factor) 4,704,842 Unlisted Options Exercise price Expiry date 7.8 Issued during quarter 7.9 Expired during quarter 7.10 Decrease through consolidation 7.11 Debentures (totals only) 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 /does not* (delete one) give a true and fair view of the matters disclosed. Sign here:... Date: 30/04/2013... (Director/Company secretary) Print name:...kylie Anderson... 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. 30/04/2013 Page 5
Mining exploration entity quarterly 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. == == == == == Page 6 30/04/2013