GBM RESOURCES LIMITED. — Interim / Quarterly Report 2014

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ABN 91 124 752 745

ASX Announcement

31[st] July 2014

REPORT FOR THE QUARTER ENDED 30[th] June 2014

Key Exploration Highlights

Corporate

• The Company completed a placement of 57 million shares at 2 cents each raising $1,140,000. The Company will issue, subject to shareholder approval 57 million attaching options exercisable at 3.5 cents each and expiring 30 June 2016, on the same terms as the Company’s existing GBZO listed options.

Pan Pacific/Mitsui Farm-in Projects NW Queensland

• Drillhole BNG008 intersected over 200 metres downhole of magnetite-red feldspar alteration with minor associated chalcopyrite mineralisation from the unconformity at 382 metres.

• Drilling this quarter re-enforces the extent of IOCG style alteration at the Bronzewing Bore IOCG discovery in the Bungalien Project Area

• Drilling of a number of key targets in the Mount Margaret West Project area adjacent to the Ernest Henry Cu-Au Mine planned for 2014.

Lubuk Mandi Gold Mine Project Malaysia

Hard Rock Drilling

• High gold grades intersected over broad interval in LMD010, 19.5 metres downhole averaging 11.1 g/t gold.

• Intersection includes 4 individual samples returning assay values of over 60 g/t gold.

• Phase two drilling is now in progress with three diamond drill rigs have been on site to complete Phase 2 which includes a total of 3,000 metres.

• Geochemical associations are considered characteristic of Phanerozoic sediment hosted orogenic gold systems which include many large gold districts throughout the world.

• Phase 3 drilling to test below the North Pit and saddle will commence in the next quarter.

ASX Code: GBZ, GBZO

COMPANY DIRECTORS

Peter Thompson Managing Director/ Executive Chairman Neil Norris Exploration Director – Executive

Cameron Switzer Non-Executive Director

Guan Huat (Sunny) Loh Non-Executive Director

Chiau Woei Lim Non-Executive Director

CONTACT DETAILS

Principal & Registered Office Suite 8, 7 The Esplanade, Mt Pleasant, WA 6153

Exploration Office 10 Parker Street, Castlemaine, Victoria 3450

Website

www.gbmr.com.au

Email [email protected]

Phone +61 (8) 9316 9100

Fax +61 (8) 9315 5475 Phone (Exploration Office) +61 (3) 5470 5033

Tailing Dam Redevelopment

• Earthworks and site preparation completed and stage one waste storage facility commenced.

• Key equipment items scheduled for delivery during July.

• Construction of major storage tanks has commenced.

• Gold production now scheduled for early in the December Quarter.

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Singapore Stock Exchange

• The company continues to progress the plan to complete an Initial Public Offering of the Lubuk Mandi Project on the Singapore Stock Exchange by the end of 2014.

ASX Quarterly Report – June 2014

GBM Resources Ltd

SAFETY AND ENVIRONMENT

No LTI or environmental incidents were reported during the quarter. The Company has now completed 36 consecutive months with no LTI’s and 80 consecutive months with no significant environmental incidents.

Review of key safety documentation has commenced as the company strives to achieve continuous improvement in safety and environmental management. GBM remains committed to maintaining an incident free record and will continue to target zero harm to our people and minimal impact upon the environments in which we work, consistent with the Company’s policy of striving to achieve the highest standards in safety and environmental management.

LUBUK MANDI GOLD MINE PROJECT, MALAYSIA – GBM 40% INTEREST

(Refer ASX announcements 26 November 2013, 31 January 2014, 25 February 2014, 12 May 2014 and 23 June 2014 for Lubuk Mandi JORC 2012 disclosures). The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcement and the form and context of the announcement have not been materially modified.

The Phase 2 drilling program commenced on the 5[th] May this year. A total of 1910.7m were drilled to the end of the quarter from a planned total of approximately 3,000m for Phase 2. The program is designed primarily to define the Main Shear Zone (MSZ) beneath the existing southern pit. Part of the program will also test the Eastern and Western Shear Zones parallel to the MSZ. A Phase 3 program is in the planning stage for testing of Main Lode extensions beneath the northern pit and ‘saddle’ between the two pits.

Assay results for Phase 1 drilling and initial sample submissions from Phase 2 were received during the quarter. To date, the drilling at Lubuk Mandi has intersected a broad, high grade zone of gold mineralisation beneath the northern end of the south pit and visible gold and significant mineralised quartz veining has been observed in a number of other holes throughout the MSZ.

Earthworks for the phase one tailings dam has commenced, and construction of the treatment plant has commenced and is on track for commissioning in October.

The Lubuk Mandi Gold Mine is located on the east coast of the Malaysian Peninsula in the state and sultanate of Terengganu, approximately 7 km south of the state capital city Kuala Terengganu. Gold was discovered in 1989 at the site and initially worked as alluvial deposits along a 2 km strike length prior to hard rock mining at Lubuk Mandi. A CIP/CIL plant operated between 1993 and 1999, producing over 107,000 ounces of gold and approximately 11,000 ounces of silver. All mining was by open pit methods. A significant below-pit resource has been indicated by previous operators although doubts exist over data quality. Current testing is planned with the objective of defining these resources to JORC standard.

Tailing Gold Production

Earthworks

Earthworks have now been completed and the earthmoving fleet has now been re-deployed to construction of the Stage 1 waste storage facility. This facility is designed to hold tailings from the first 1 to 2 years of production. Construction of the tailings retreatment plant has now commenced with major tanks now under construction utilising regionally based construction companies.

Construction

Purchasing of the required plant has been completed; major items of floatation and leaching circuits being sourced from Yantai Jinpeng Mining and Machinary Co. Ltd. in China who will also install and commission this equipment . Equipment including the floatation cells are scheduled to arrive on site by the end of July/August. Construction is being supervised and managed by the staff of GBM’s Joint Venture partners Angka Alamjaya. Electricity and water supply to the plant is also advancing with connection to the major substation on site now completed by the regional power authority, a short supply line to the tailings treatment plant will be constructed to supply power to the operation. Reticulated water is now connected to site with a branch line to the process plant in the final design stages, and planning for the installation of the supply for process water is also nearing completion.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Photographs; Construction activities at the Lubuk Mandi Tailings Processing Plant site in Malaysia. Top, welding of panels for tailings surge tanks, bottom left lifting a panel into position, bottom right tailings plant site vista.

Plant construction commenced during the June Quarter and is targeted for completion, commissioning and initial gold production by October 2014.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Plant Site
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Figure: Lubuk Mandi Gold Mine site layout plan.

Hard Rock Drilling Program

Phase 1 Assay Results

(Refer ASX announcement 23 June 2014)

All assay results for the ten Phase 1 drill holes were received during the quarter. Three of the four Phase 1 holes to penetrate the MSZ intersected extensive quartz veining within broad intervals of intense host rock shearing. Visible gold was associated with quartz veining and shearing in all three of these holes. The fourth hole, LMD0009, may have been terminated prior to intersecting the ore zone and will be extended on this assumption as part of the current Phase 2 program.

Observations of extensive massive and laminated quartz veining from hole LMD0010 beneath a zone of strong gold mineralisation in historic drilling results was confirmed by the return of an intersection of 19.5 metres downhole from 162.3 metres averaging 11.1 g/t gold . This included a 1.9 metre downhole interval from 168.9 metres comprising three samples each over 60 g/t Au and averaging (length weighted) 66.4 g/t Au.

Significant Main Zone intersections from the stage one drilling programme are summarized in the table below.

Table: Significant Main Zone intersections at Lubuk Mandi from Phase 1 drilling programme, a natural cut-off grade of 0.1 g/t Au was used.

ASX Quarterly Report – June 2014

GBM Resources Ltd

These results provide strong evidence for the continuation at depth of gold mineralization in the MSZ below the pit. This is the first material from the MSZ available to GBM. The MSZ is significant in that it yielded over 110,000 ounces of gold from a vertical interval of around 45 metres in the overlying open pit from mining during the 1990’s.

Preliminary analyses of a large geochemical data set now available for the phase one drilling confirms a very strong correlation between gold and silver with a ratio generally around 10:1 Au:Ag. Elevated levels of lead are associated with high gold grades, and arsenic displays a positive correlation with gold. Antimony, bismuth, molybdenum, copper and tungsten are only present at extremely low levels if at all. These general metal associations combined with the structure, nature of veining and host rock suggest that the Lubuk Mandi Gold deposit is similar to other Phanerozoic sediment hosted orogenic gold deposit formed at intermediate depths in the crust. Similar mineralising systems elsewhere in the world have produced very large gold deposits.

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Figure: Lubuk Mandi Longitudinal Projection showing Phase one drill hole (diamonds), proposed phase 2 drill holes (blue dots). Also shown is the approximate pre mining surface and the base of the open pit which attained a depth of approximately 50 metres below surface and yielded over 110,000 ounces of gold. The background is gridded gramme-metres (the product of estimated true thickness and length weight averaged grade) derived from data relating to both GBM and previous drilling. The grid is from the Mapinfo Discover inverse distance weighting method. Data from previous drilling is incompletely validated and should be taken as indicative only.

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Close-up photograph from mineralised interval in LMD0010 (170.5m, 65.6ppm Au). Milky white massive sheared brecciated quartz vein with polymictic clasts (carbonaceous shale, shale, sandstone with minor epidote). The vein consists of quartz-carbonatelimonite-pyrite, up to 3% pyrite.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Photographs; HQ Drillcore from MSZ intersection in LMD010 showing extensive quartz veining and shearing, and gold grades for the high grade section of this intersection.

Phase 2 Drilling

The Phase 2 hard-rock drilling program at Lubuk Mandi commenced on the 5th of May drilling a total of 1910.7 m from 12 drill holes to the end of June. To date a total of 21 hard rock drill holes have been completed at Lubuk Mandi by GBM, with an additional seven diamond holes and 1074.6 m planned to be completed from Phase 2 before the end of July. All holes have been diamond drilled from surface with the oxidised zone drilled PQ core size and the remaining HQ size. Triple-tube equipment has been employed throughout the program producing excellent core recovery through the heavily fractured ore zones.

The figure below shows the location of all Phase 1 and 2 drillholes completed since November 2013.

The Phase 2 program is designed primarily to intersect the Main Shear Zone (MSZ) for resource definition but also to test the Eastern and Western Shear Zones (ESZ, WSZ) parallel to the MSZ. In the MSZ, gold mineralisation is primarily associated with sheared and brecciated massive quartz veins surrounded by sulphide rich metasediments that contain up to 5% pyrite, with minor arsenopyrite, galena and trace sphalerite. Silicification is well developed surrounding highly deformed and brecciated wall rock. Significant hanging wall related deformation and stock work veining is associated with thrust faulting, whereas the footwall to mineralisation is mostly undeformed and barren for gold, yet with extensive sulphide-bearing stockwork veining.

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ASX Quarterly Report – June 2014

GBM Resources Ltd

The Western Shear Zone (WSZ) was defined from recent GBM mapping work. Phase 1 and 2 drilling has highlighted a thin (1-2 metre wide) semi-continuous zone of low grade mineralisation along the western flank of the south pit. GBM drilling has intersected the WSZ on six occasions with significant gold grades (>0.5 ppm Au) observed in all three phase 1 holes (LMD0004, LMD0006, LMD0008). Visible gold was also observed at 150.5m in LMD0004. Surface rock chips also support the presence of a continuous mineralised structure with gold assays up to 6.05ppm. There is no exploration target defined for the Western Shear Zone and no allowance for this zone is included in the original Lubuk Mandi Development Plan.

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Figure: Lubuk Mandi Gold Mine southern pit with all completed GBM Phase 1 and 2 drilling and remaining planned Phase 2 drill collars (co-ordinates UTM Zone 48, Northern Hemisphere WGS84).

ASX Quarterly Report – June 2014

GBM Resources Ltd

Table: Phase 1 and 2 drilling summary. Holes drilled in June Quarter highlighted in Yellow (Phase 2).

The Eastern Shear Zone (ESZ) is an intensely sheared graphitic and brecciated zone up to 60 m wide on the eastern margin of the south pit. A shallow embayment in the pit is a result of late stage mining of this zone. Discussion with personnel involved in the mining of the ESZ during 2008, highlight that small scale mining was targeting free gold observed in pan concentrates. The ESZ can easily be traced on ground adjacent to this mined eastern embayment, however to the north and south of this the structure and orientation of the shear zone becomes more difficult to follow. Drilling has confirmed the extension of the ESZ to a depth of at least 130 m however no significant gold mineralization has yet been identified. The intense shearing and graphitic alteration observed in the ESZ is interpreted to postdate gold mineralisation. At the end of the current phase of drilling GBM will have intersected the ESZ in drilling on six occasions plus five short trenches dispersed along the 350 m length of the ESZ. Results received to date appear to have significantly downgraded the Eastern Shear Zone exploration target.

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ASX Quarterly Report – June 2014

GBM Resources Ltd

Drilling and Trench Sample Summary

Processing of diamond core samples is continuing on-site. By the end of the quarter, 592 samples from Phase 2 drilling had been received by ALS Laboratories in Brisbane for processing (results not yet received). A further 1,026 samples have been processed and are in transit to Brisbane.

The 357 trenching samples from the WSZ and ESZ collected in the last quarter have also been received by ALS Brisbane and are in process at the laboratory.

Historic Data

A thorough inspection of historic data stored on site has discovered an almost complete set of grade control bench floor plans from the Lubuk Mandi gold mining operation. The grade control plans range in depth from the pre-mining surface (RL ~95 m) to the current pit floor (RL ~-45 m).

The grade control plans were geo-referenced and reprojected to UTM WGS 84, and the interpreted polygons digitised around the >0.2 ppm grade contours. Individual point data from the bench plan drilling will also be digitised, with the aim of developing a 3D resource model of ore already mined. This data provides support for and significant confidence in the historic diamond drilling data.

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Figure: View to NE showing digitised grade control bench plans with 0.2 ppm Au cut off in blue. Outline of GBM exploration/resource target outlined in yellow. Satellite image is draped on surveyed elevation contours.

Forward Programme

An additional seven diamond holes and 1074.6 m were drilled to complete Phase 2 before the end of July. GBM are currently in the process of collating drilling data, standard operating procedures and finalising geological interpretations in preparation for the resource estimation program.

The figure below shows the completed and planned drill hole long projection pierce points on the MSZ for Phase 1 and 2 drilling programs.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Figure: Lubuk Mandi Longitudinal Projection showing Phase 1 drill hole pierce points (yellow text), completed Phase 2 drill holes (blue dots) and remaining planned Phase 2 drill holes (black dots). Historic drilling pierce points are also shown colour coded by grammetres. The background is gridded gram-metres (the product of estimated true thickness and length weight averaged grade) derived from data relating to both GBM and previous drilling. The grid is from the Mapinfo Discover inverse distance weighting method. Data from previous drilling is incompletely validated and should be taken as indicative only.

QUEENSLAND EXPLORATION ACTIVITIES Mount Isa Region Copper Gold Projects

Pan Pacific Copper/ Mitsui Farm-in Projects

(Reported pursuant to the 2004 Edition of the JORC Code)

The June quarterly marks the sixteenth quarter of activity under the Farm-in Agreement with multinational companies Pan Pacific Copper and Mitsui Corporation. The primary aim of the joint venture is the discovery and development of large-tonnage Cu and Cu-Au deposits within the Proterozoic rocks of the Cloncurry district in NW Queensland.

The exploration budget for the fifth year of the Farm-in ending 31 March 2015 is approximately $2.2M. Under the Farmin Agreement, Pan Pacific / Mitsui, through their co-established Australian subsidiary Cloncurry Exploration and Development Pty Ltd (“CED”), can spend up to A$55 million on the development of new copper–gold exploration and mining projects in northwest Queensland to earn 90% in the projects.

Activity Overview:

Exploration fieldwork during the quarter included the completion of deep diamond drill holeBNG008 through thick cover at Bronzewing Bore in the Bungalien Project area south of Mt Isa. Hole BNG008 has intersected a significant interval of sulphide-bearing intense magnetite alteration from the top of basement and lends further encouragement that the project is highly prospective for large IOCG Cu-Au-magnetite deposits.

At the Burke Bore prospect, also in the Bungalien Project, an infill partial leach (MMI) soils program was completed and results received and interpreted. A large, discrete high-tenor silver anomaly adjacent to a semi-coincident magneticgravity anomaly requires further investigation and drill testing.

At the Mount Margaret Project, located north of the Ernest Henry Mine, a detailed airborne magnetic survey of over 1,100 line kilometres was completed over the FC2 and FC2W prospect areas and the processed survey data received.

ASX Quarterly Report – June 2014

GBM Resources Ltd

Also at Mt Margaret, a large grid-based MMI soils survey was completed and samples dispatched to SGS laboratory in Perth.

Other activity during the quarter involved the location and reprocessing of historical geophysical data for a number of Mt Margaret prospect areas and the creation of a merged project-scale dataset. This data was then used to create detailed 3D inversion models for gravity and magnetics, the first time this has been achieved for the highly prospective Mt Margaret project area. Ground gravity surveys were planned at five Mt Margaret prospects and at the Brothers prospect area (Bungalien). A detailed IP geophysical survey was also planned to cover five prospect areas at FC2W (Mt Margaret).

Negotiations with Glencore (Xstrata) saw the delivery of drill core from five historic WMC holes to the GBM core yard for reprocessing and interpretation. This core will aid in drill program design for testing of the MT conductivity anomalies defined by the JV in previous quarters.

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Figure: Location map showing Farm-in Areas.

ASX Quarterly Report – June 2014

GBM Resources Ltd

Bungalien Project

Activities in the June Quarter included MMI infill soil sampling at Burke Bore, drilling of a diamond hole (BNG008) at the Bronzewing Bore prospect, and ongoing planning and analysis to identify possible drill targets at ‘The Brothers’ and the Burke Bore prospects. Planning included the design of a gravity survey to expand coverage around ‘The Brothers’ geophysical anomalies.

The four tenements comprising the Bungalien project are located adjacent to the major Pilgrim Fault within the Quamby-Malbon Zone of the Mount Isa Block Eastern Fold Belt. The Proterozoic basement lies beneath up to 500m of Georgina Basin cover rocks and is dominated by felsic volcanics, mafic volcanics and quartzite intruded by a large pluton and associated stocks of Wimberu Granite. The Wimberu Granite is a member of the 1550-1500Ma Williams Batholith plutonic suite which has a close spatial relationship to copper-gold mineralisation in the Eastern Succession. Nearby to the west of the project area lie the Trekelano (Cu-Au) and Tick Hill (Au) deposits, and to the east the Mount Dore mineralised corridor which contains past and producing Cu-Au deposits including Starra, Mount Dore, Mount Elliot, and the recently discovered Merlin Mo-Re deposit.

The main focus of exploration efforts in the Bungalien tenement has been investigation of IOCG-style mineralization intersected in scout drill-holes at the Bronzewing Bore prospect beneath 300-400m of overlying cover. Recent efforts have been aimed at advancing Bronzewing Bore through geophysical surveying and modelling and drill-testing. Efforts have also been directed towards identifying potential drill targets beneath deep cover at the nearby ‘The Brothers’ prospect, and also at the Burke Bore prospect (beneath shallow cover) to the north.

Bronzewing Bore Prospect

Diamond drill hole (BNG008) at the Bronzewing Bore prospect was designed based on an analysis of previous drilling (including structural interpretation of oriented drill-core) and of all existing geophysics, especially 3D inversion models of gravity and MT data. A schematic geological cross-section was created to aid in interpretation of the basement and positioning of the collar (see figure below). The hole targeted a both the high magnetic and gravity feature successfully tested by drillhole BNG001 and an interpreted mineralised NW-SE trending structural/lithological contact zone between Wimberu Granite (intruded at ca 1510ma) and older felsic and mafic volcanics (emplaced at ca 1760ma). BNG008 was sited close to BNG001 in which an encouraging 200m mineralised interval at approximately 0.1% Cu was intersected (chalcopyrite and magnetite disseminated in granite). Hole BNG008 reached a final depth of 712m.

Drill-hole BNG008 passed through the unconformity above the Proterozoic basement at a down-hole depth of 382m and as modelled entered medium-grained Wimberu Granite. The top 13m of basement is a mixture of magnetite- and apatite- rich breccia or breccia veins (locally containing clasts of possible country rock), intermixed with Wimberu Granite and small sections of a fine-grained grey-green igneous rock. Magnetite overprinting Wimberu Granite is very pronounced from 398 to 504m down-hole and then tapers off in intensity until about 610m down-hole. Magnetite averages 10-15% for over 100m from 400m down-hole. The magnetite occurs as bands of alteration (rare magnetite veins are observed locally within these bands) within the Wimberu Granite. The alteration varies from lightly disseminated (typically with magnetite replacing quartz) to areas up to 0.5m width where it is almost 100% magnetite. The magnetite bands are typically accompanied by red feldspar alteration (particularly in selvedge areas) and variable amounts of chlorite ± carbonate. From 610m down-hole, the magnetite content is usually 1% or less, locally higher associated with magnetite and red-feldspar alteration bands. The high-magnetite zones overprinting Wimberu Granite could be termed a ‘magnetite skarn’. The first clearly identifiable lense of foliated fine-grained felsic country rock occurs at 675m and the last 40m of the hole suggests that the main contact zone with the country rocks had been reached, although clearly not penetrated completely as the hole finished in granite.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Figure: Bronzewing Bore Prospect. Compilation of geophysical anomalies and structural trends in the vicinity of mineralised drillhole BNG001. The drill-hole trace for BNG008 is shown over background image of TMI_RTP. Depth slice contours at ca -265mRL also shown through 3D gravity and MT inversion models.

Sulphides occur locally within the core in several different contexts. Minor pyrite ± chalcopyrite is observed locally in both the coarse euhedral magnetite + apatite + chlorite breccia near the top of the basement, and also in the magnetite skarn although usually < 1% or at trace levels only. Carbonate is typically present with the sulphides. Pyrite and/or chalcopyrite is also locally observed associated with carbonate breccia or veining ± chlorite and with magnetite content usually low and typically occurring near selvedge zones. The best chalcopyrite mineralisation observed is in a zone of carbonate-infill breccia and veining developed in Wimberu Granite between ca 595-605m down-hole. This includes a 0.3m section at 600m down-hole that contains ca 4% chalcopyrite.

The magnetite-rich band and the euhedral magnetite + apatite breccia zone above it in BNG008 appears to correlate with similar intervals in BNG001. This suggests that a broad band of magnetite alteration (and probably sulphide mineralisation) is dipping to the NNE. The amount of magnetite intersected in BNG008 was surprising and indicates that the extent of the magnetite alteration is larger than just the area immediately surrounding BNG001. Both holes will be compared to see what links between them can be verified. Core cutting and sampling of BNG008 was underway at the end of the quarter.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Figure: Bronzewing Bore Prospect. Cross-section with schematic target model through BNG001 & BNG008 showing drill-hole lithology and magnetic susceptibility for both, and Cu assays for BNG001. The inferred NNW-SSE trending contact zone with country rock (in this case foliated felsic volcanic or shallow intrusive). Note that magnetic susceptibility is not directly comparable between holes as a different instrument was used for BNG001.

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Photograph: Bronzewing Bore Prospect. Drill-core from BNG001 (441-445m) showing typical magnetite (black areas) + red-feldspar alteration of Wimberu Granite. Magnetite initially replaces quartz.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Photograph: Bronzewing Bore Prospect. Drill-core from BNG001 at 600-600.3m (sawn section) showing carbonate-infill breccia developed in Wimberu Granite. This section contains ca 4% chalcopyrite.

Burke Bore Prospect

A Mobile Metal Ion (MMI) soil survey was completed in late 2013 at the Burke Bore prospect over geophysical anomalies at three sites on the Burke Bore prospect. As reported previously, a strong Ag anomaly is indicated in the MMI soil results at area B at Burke Bore with a smaller area of anomalous Cu and Au at area A. An infill MMI survey consisting of 174 samples (including 8 duplicates) was completed in mid-May 2014. The survey was designed to close off the Ag anomaly, and also test the extent of the indicated Au and Cu anomalies at area A. Some lines at area B have been extended to test the background values beyond the anomalous areas adjacent to the magnetic and gravity target areas. The assay results were returned by mid-June.

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Figure: Burke Bore Prospect Site B. Thematic map of MMI Ag (ppb) including infill assay data. The Ag anomaly is adjacent to the NW flank of a gravity high and overlapping magnetic high.

ASX Quarterly Report – June 2014

GBM Resources Ltd

At site B the combined data set successfully closes off the strong Ag anomaly. A further high-magnitude Ag anomaly (129ppm) is indicated at the western end of one of the line extensions. Ground-checking of these anomalous areas at site B is underway. Additional sample material was collected at each MMI sample site and tested for pH and conductivity. This material has all been tested and the results are currently being reviewed and integrated with the MMI results to help with defining collars for RC test drill-holes at site B .

Forward Programme

The next quarter at Bungalien will see the completion of logging, structural analysis and sampling of BNG008, a comparison of geology between BNG001 and BNG008, and revision of the exploration model for Bronzewing Bore.

The analysis of soil pH and conductivity results over the Burke Bore area will be finalised and compared with MMI results. Intepretation of MMI and pH data, IP survey data and existing gravity and magnetics will vector scout RC drill collar locations at Burke Bore.

Mount Margaret West Project

The Mt Margaret West project comprises areas of Middle Proterozoic basement, overlain by younger cover which is generally less than 100m within the CED JV tenements. Ernest Henry, the largest IOCG deposit in the Cloncurry district and located immediately south of the JV project area, is hosted within a brecciated and altered intermediate volcanic unit of the Proterozoic basement. Whilst in general this is a relatively mature area in terms of historical exploration, GBM consider that many prospective areas remain under-explored.

Work completed during the quarter included the completion of a detailed airborne magnetic survey at FC2/FC2W, completion of a 539 sample point partial leach (MMI) soil survey at FC4S late in the quarter and the re-logging and interpretation of historic WMC drill core from the FC4S prospect area. In addition, compilation, reprocessing and interpretation of much historic geophysical data (magnetics, gravity and IP/MIMDAS) across the project area was completed during the quarter.

FC2 & FC2 West Prospects

An aeromagnetic survey was commissioned during the quarter for the FC2 and FC2W prospect areas to provide more detailed magnetic data over prospective drill target areas that were previously covered by historical 400m spaced flight lines. The survey was flown by Thompson Aviation using 100m flight line spacing at an elevation of 30-35m for a total of approximately 1100 line kilometres. A detailed 3D magnetic inversion using the recent 100m flight line data has been initiated for FC2W and FC2 prospect areas and should be completed by late July.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Figure: FC2 & FC2W Prospect area. Completed airborne magnetics survey extent. Background image is TMI-RTP. Historic drill collars (black) and JV drill collars (blue) also shown. Contours are merged JV and state bouguer gravity (HP5k, 0.2mgal).Proposed MMI soil grid in northern prospect area (black stars).

Forward Programme

The September quarter will see an increase in activity at Mount Margaret. Continued re-logging of historic drill holes and interpretation of recently collected MMI soil samples over the FC4S prospect will help to finalise the drill program planned to test MT anomalies located just north of Ernest Henry Mine. The IP geophysics program at FC2/FC2W will be completed during August along with detailed ground gravity surveys at FC2W and three FC4 target areas.

Continued review and reprocessing of historic and JV geophysical data will produce up to date 3d inversions for the Mount Margaret project area and assist drill program planning for the 2015 field season.

ASX Quarterly Report – June 2014

GBM Resources Ltd

QUEENSLAND EXPLORATION ACTIVITIES Mount Morgan Copper Gold Project

The Mount Morgan Project is centred 40km south west of Rockhampton in Queensland in close proximity to the world class Mt Morgan Au Cu deposit which produced in excess of 8.0M ounces of Au and 400,000 tonnes of Cu metal. The existence of a deposit of this scale in isolation is extremely rare in mineral districts around the world, and GBM consider that on a statistical basis alone, there is a high probability that a number of previously unmined or under-exploited goldcopper deposits exist within the region. Interestingly, the second largest recorded gold producer in the area, the Mount Usher Mine with 30,000 ounces of recorded production is included within the boundaries of GBM’s new licence application EPM25678 ’Mountain Maid’, lodged during the June Quarter.

The project area originally consisted of a single tenement (EPM16057) enclosing a cluster of historic Cu Au mines. Research of prior exploration activities suggested that an opportunity existed for the potential discovery of further areas of mineralisation. Review of previous exploration data has also highlighted a number of significant geochemical and geophysical anomalies representing targets for future exploration.

GBM Resources is now the beneficial holder of seven granted Exploration Permits for Minerals and three Exploration Permits for Minerals Applications, one of which is the recent application lodged in June 2014 (Mountain Maid). The tenement group, including applications, covers an area of approximately 860 square kilometres.

The targets and anomalies in the Mount Morgan Project, generated through detailed compilation and interpretation of historic data and recent intensive field programs, represent advanced stage targets of significant size and tenor that require follow up activities and rapid drill testing.

Priority targets for further work have been defined on a range of features including; soil, rock-chip and historic drilling, Cu-Au +- Mo anomalism, presence of porphyry or IRGS alteration assemblages in surface rocks, geophysical signature, prospective host rocks, structural setting or proximity to Mt Morgan orebody, and size potential. On this basis a number of key targets have been identified including: Smelter Return, Limonite Hill and other buried targets within the Bajool Project, Sandy Creek and Oakey Creek and the Mt Gordon porphyry system.

The company’s geological staff are now undertaking a project review and will formulate a work programme and budget focused on the priority target areas for implementation as soon as practicable.

ASX Quarterly Report – June 2014

GBM Resources Ltd

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Figure; Mount Morgan Project area plan showing key targets and Tenement status (Reported pursuant to the 2004 Edition of the JORC Code)

VICTORIAN EXPLORATION ACTIVITIES

Yea Project

Following receipt of research report which re-enforces the potential of the Yea Project area to host Intrusive Related Gold Systems, GBM staff are reviewing target rankings and exploration programmes required to further progress is promising greenfield area.

Willaura Project

During that past year the Geological Survey of Victoria have released information suggesting the Stavely Region is an Andean Style volcanic arc which further enhances the prospectivity of the area as a host for porphyry copper style CuAU deposits. This is vindication of a long held belief of GBM resources and strongly supports maintaining the company’s tenement holding in the region. Recent drilling by Stavely Minerals and Navarre Minerals continue to support this with porphyry systems being confirmed and copper mineralisation intersected by both companies.

GBM are reviewing our target ranking and programmes to test these areas as well as seeking suitable joint venture partners to further exploration of the project.

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ASX Quarterly Report – June 2014

GBM Resources Ltd

TENEMENT SUMMARY

Throughout the quarter required payments and reports have been lodged as necessary. Technical reports continue to be lodged and are up to date in line with Department requirements.

• Horsecreek EPM18208 relinquishment approved (50% dropped)

• Dry Ck EPM18172 partial relinquishment of 12 sub-blocks approved.

• Bungalien EPM18207 partial relinquishment approved (50% dropped)

• Brightlands (Chumvale) EPM14416 nil relinquishment approved.

• Brightlands and Black Range were renewed for a further two years each.

Mountain Maid EPMA25678 application was submitted over an area of 8 sub-blocks in the Mt Morgan region.

Mt Morgan Project Status approved by the Department.

Grassy Bore2 EPM19256 granted for a period of 5 years, consequently Grassy Bore EPM15681 was conditionally surrendered.

No renewal was sought for Diamond Creek EPM19193 and this was conditionally surrendered.

Mt Malakoff EPM16398 transferred to GBM. Still awaiting Cotswolds transfer, documents have been sent to the Department.

During the quarter ended 30 June 2014 there were no changes to beneficial interests in respect of exploration assets subject to farm-in agreements.

GBM holds a 40% interest in the Lubuk Mandi mineral assets via its 40% ownership of Angka Alamjaya Sdn Bhd, a Malaysian company which holds the mining concession for the Lubuk Mandi Gold Project.

ASX Quarterly Report – June 2014

GBM Resources Ltd

Figure; GBM Tenement summary table as at 25[th] July 2014.

ASX Quarterly Report – June 2014

GBM Resources Ltd

CORPORATE

The Company spent $738,000 in the quarter, of which $564,000 was for exploration and $174,000 for administration costs. Cash at 30 June2014 was $0.527 million. In July 2014 the Company received CED farm-in funds for the June quarter amounting to $624,661 for farm-in program expenses for the September 2014 quarter.

Capital Raising

Subsequent to the end of the quarter the Company announced that it had completed a placement of 57 million shares at 2 cents each raising $1,140,000. The Company will issue, subject to shareholder approval 57 million attaching options exercisable at 3.5 cents each and expiring 30 June 2016, on the same terms as the Company’s existing GBZO listed options.

Share Registry Changes

During the quarter the Company advised of a change to the contact details for its share registry, the new details are as follows:

Advanced Share Registry Services 110 Stirling Highway Nedlands WA 6009 Fax (08) 9262 3723.

All other contact details remain unchanged.

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For Further information please contact:

Peter Thompson Media Managing Director Karen Oswalds GBM Resources Limited Tel: 08 9316 9100 Tel: 0423 602 353

Explanatory notes:

Competent Person’s Statement for Exploration Results included in this report that were previously reported pursuant to JORC 2004: This information has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Neil Norris, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian Institute of Geoscientists. Mr Norris is a full-time employee of the company, and is a holder of shares and options in the company. Mr Norris 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 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Norris consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Neil Norris, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian Institute of Geoscientists. Mr Norris is a full-time employee of the company, and is a holder of shares and options in the company. Mr Norris 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 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Norris consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Appendix 5B GBM Resources Limited Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/01, 01/06/10, 17/12/10

Name of entity

GBM Resources Limited

Consolidated statement of cash flows

• See chapter 19 for defined terms.

Appendix 5B Page 1

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Appendix 5B Mining exploration entity quarterly report

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

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

Year to date includes the following transactions:

• 57,779,118 ordinary fully paid shares to acquire a 40% interest in Angka Alamjaya Sdn Bhd, a Malaysian company holding the mining rights to the Lubuk Mandi Gold Project, fair value of shares issued was $2,831,177; and

• 20,000,000 listed GBZO options issued to Alvito Capital Holdings Inc as consideration for the provision of corporate advisory and promotional services, fair value of the options issued was $400,000.

• 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

• Expenditure for the quarter of $589,200 ($2,021,862 year to date) incurred by other entities under joint venture farm-in agreements on projects held by the Company has been included at 1.2(a).

• See chapter 19 for defined terms.

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Appendix 5B GBM Resources Limited Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

Estimated cash outflows for next quarter

The Company announced to ASX on 3 April 2014 that its farm-in partners Pan Pacific Copper Co Ltd and Mitsui Co Ltd had approved the funding of a $2.2 million expenditure program for the 12 month period to 31 March 2015. Since the end of the June quarter the Company has received approximately $625,000 in respect of the September 2014 quarter farm-in period.

Subsequent to the end of the June quarter, the Company completed a share placement raising $1.14 million. The Company is continuing to review its short and longer term cash requirements and capital raising options.

Reconciliation of cash

Changes in interests in mining tenements

• See chapter 19 for defined terms.

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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.

• See chapter 19 for defined terms.

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Appendix 5B GBM Resources Limited Mining exploration entity quarterly report

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 5).

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 31 July 2014 Company Secretary

Print name: Kevin Hart

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 107: 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.

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• See chapter 19 for defined terms.

Appendix 5B Page 5

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