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Last Updated: 01/05/2012

September 2011 Quarterly Report

September 2011 Quarterly Report

Tasmania Mine Operations

• A 157 day period without lost time injury ended in August, with two LTIs in the quarter.

• Mining of the high grade Western Zone commenced in September, with immediate impact on mill grades and gold production.

• September production was 4,378oz at a cash cost of A$1,124 per ounce, due to the commencement of production of higher grade material from the Western Zone.

• Gold production for the September quarter was 10,348oz, a reduction of 10% from the June quarter.

• Cash cost of production increased to A$1,398 per ounce, with average gold price received of $1,631 generating a cash surplus.

• Cost-saving initiatives continued, with steady reduction in costs achieved and forecast.

• Resources and Reserves updated to 372,000 ounces and 85,000 ounces respectively.

Tasmania Mine Exploration

• Infill diamond drillholes in the Western Zone and F1 footwall lode show strong mineralisation, with intercepts including 3.2m @ 43.7g/t gold, 2.1m @ 24.8 g/t gold and 3.0m @ 13.5 g/t gold.

Corporate

• Early redemption of convertible notes from cash flow has commenced.

• Appointment of Mr Mike Botting and resignation of Mr Neville Bergin as Non-Executive Chairman.

CEO’S COMMENTARY ON THE QUARTER

BCD Resources CEO, Peter Thompson said “The commencement of high grade stoping in early September represents a milestone for the Tasmania Mine, following a full year of development of the Western Zone stopes. It is pleasing to see this material being mined cleanly and efficiently, and the associated operating costs reducing. Following a long period of stope establishment, and concerted efforts to reduce costs, the unit operating costs are now falling, and profit margins have increased.

Reserves fell, as further decline development was not considered economic because of lower ounces per vertical metre below 1210m level and the East Hanging Wall lode was found too thin to mine profitably. The 47,000 ounces removed from Reserves below the 1210m level are under ongoing review and should they become economic due to changed circumstances, would be reclassified as Reserves.

While the conversion of convertible notes is at the discretion of note holders, the Company is redeeming some of those notes by early repayment and with the cash flow now being generated from mining the Western Zone stopes BCD is planning for further redemptions. We look forward to the elimination of all convertible note debt.”