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Last Updated: 01/05/2012

December 2011 Quarterly Report

December 2011 Quarterly Report

Tasmania Mine Operations

• Strong safety performance with no LTIs and only one MTI in the quarter.

• Mining of the high grade Western Zone continued with excellent recovery and extraction rates, resulting in higher gold production.

• December quarter production was 12,346 ounces, an increase of 19% from the September quarter.

• Cash cost of production reduced to A$1,034 per ounce, with average gold price received of $1,710 per ounce generating a significant cash surplus.

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

• Closure date for Tasmania Mine underground operations of June 2012 was announced.

• Lefroy Tailings Project approvals process underway, extending gold production to Dec 2012.

Corporate

• Early redemption of convertible notes from cash flow continued, with $6.7m (including interest) repaid to date and original convertible note debt of $17.6m due in Feb 2012 reduced to $6.7m (including interest) at end January.

• Gold hedging with delivery of 7,000 ounces at A$1,750/ounce has been successful and is now complete.

• Partly-paid shares cancelled by payment of agreed total of $32,500.

• Buyback of small and unmarketable parcels will be announced on 1 February.

CEO’S COMMENTARY ON THE QUARTER

BCD Resources CEO, Peter Thompson said “Extraction of Western Zone ore using the Radial-In-Reef method is slightly ahead of schedule and has been mined safely, cleanly and efficiently. The high grade ore produced lead to the highest mill recoveries seen for some years, at 88%. Lower operating costs combined with high gold prices and hedging at A$1,750/ounce has provided strong cash flows and the ability to make significant debt reduction. All secured convertible note debt is scheduled to be repaid in the March quarter, comprising $5m on 14th February and the remaining $1.7m to PPT Nominees PL during March under an extension of the loan under the same terms.

A tight mining schedule until mine closure at the end of June will extract all remaining viable ore with a reducing workforce and cost base.

The Lefroy Tailings Retreatment Project is planned to extend gold production until December with only minor plant modifications required. Beyond that a long-term re-utilisation of the Beaconsfield bacox plant is being sought.”