IRW-Press: Xceed Resources Ltd.: Report For The Quarter Ended 30 September 2012

by Press Office

(IRW-PRESS and WireNews+Co) - Vienna, Austria - 01 November 2012

Key Points:

• Independent Technical Consultant’s review of Moabsvelden bankable feasibility study completed successfully with no fatal flaws discovered and confirms the project to be financially sound.

• Drafting of various agreements covering initial investment by Thebe Mining Resources (TMR) into the Moabsvelden Project company in final stages and expected to executed in the coming days.

• Indicative term sheets previously received from short listed banks refined in preparation of going to credit committees.

• Permitting applications progressing.

• Maiden resource of 19.8 million tonnes established at Bankfontein project.

• Sale of unmarketable parcels of Xceed shares completed

Independent Technical Consultant’s Review

As previously advised to the market, the Company has short listed two South African banks, Standard Bank and Rand Merchant Bank (Banks), to consider providing project finance for the development of the Moabsvelden thermal coal project. To enable the Banks to submit final credit approved offers of project finance, Badger Mining & Consulting (Pty) Ltd (Badger), a locally based consultancy firm with recognised expertise in the South African coal industry, was appointed to undertake an independent technical review of the Moabsvelden bankable feasibility study on behalf of the Banks. The Badger review, which covered all technical and financial aspects of the project, has now been completed and Badger have concluded the project to be financially sound and have confirmed that no fatal flaws were detected. The directors are pleased that this detailed independent review has confirmed the findings of the feasibility study. Badger have recommended various minor changes to the capital and operating forecasts amounting to an increase in the project’s capital costs by A$0.16m and it’s recurrent operating costs by A$0.665m. Neither of these changes are material to the project which is expected to cost A$30m to develop and generate average post tax cash flows (nominal) before debt service of A$18.9m per annum.

The Banks are currently reviewing Badger’s report to enable them to prepare their internal credit submissions. Further refinements to the indicative non-binding term sheets may be made to reflect Badger’s findings. The directors believe that bank funding of not less than 60% of the development cost is likely to be obtained in addition to cost overrun and working capital facilities.

Thebe Mining Resources

As previously advised to the market, it is proposed that Thebe Mining Resources (TMR) will invest a total of ZAR90m in the Moabsvelden project company and Xceed Resources Limited. TMR is a wholly owned subsidiary of Thebe Investment Corporation, one of the largest and most respected empowerment corporations in South Africa The Thebe investment committee has met and approved an initial investment of ZAR65 million into the Moabsvelden Project Company and drafting of the formal documentation governing this investment is expected to be finalised very shortly.

The initial TMR investment of ZAR65m is dependent upon a number of conditions being satisfied, including the Company obtaining a credit approved offer of development finance from a bank and the granting of a mining right for the development Moabsvelden by the South African regulators. The application for the mining right was submitted in November 2011. The satisfaction of the conditions attached to TMR’s investment will result in TMR acquiring a 30% interest in the Moabsvelden project company and Xceed’s interest diluting from 74% to 70%.

The proposed TMR investment of ZAR25m directly into Xceed will be assessed once the total debt funding is secured and the size and pricing of any future capital raising by Xceed is known.

Regulatory Approvals

During the quarter the Company held ongoing meetings with the Department of Mineral Resources (Mining Right), the Department of Water Affairs (Water Licence) and the Department of Economic Development, Environment and Tourism (Environmental approval) in regard to its submitted applications for regulatory approvals. These applications are progressing and the Company has no reason to believe that all approvals will not be given in due course.

Bankfontein (XCD: 15% earning 70%)

During the Quarter, the Company received a Competent Persons Report from its independent geological consultants, Gemecs (Pty) Ltd (Gemecs), in respect of the initial drilling programme undertaken on the Company’s Bankfontein project located in the Ermelo coalfield, South Africa.

Gemecs report that the JORC compliant in-situ resources on the project currently total 19.76 million tonnes (mt) (Indicated 6.05mt Inferred 13.71mt). 15.84 million tonnes (Indicated 5.94mt Inferred 9.91mt) of this total are of potential economic interest as they are contained within the high yielding, high quality B Lower and C Lower seams of the Ermelo coal field.

The Indicated and Inferred resources contained within the B Lower seam total 11.63mt and have an average seam thickness of 2.13m. The Indicated and Inferred resources contained within the C Lower seam total 4.21mt with an average seam thickness of 0.85 metres. If mined, the coal would primarily be extracted by underground mining means, potentially accessible from an initial open cut operation. Two areas have been identified where the stripping ratios are low enough (sub 4:1) to potentially support an initial open cut mining operation, thereby enabling a low cost access to underground mining.

Washability testwork undertaken indicates that primary yields to produce an export quality coal product average 66% in the case of the B Lower seam and 95% in the case of the C Lower seam.

All of the objectives of this initial drilling programme, namely: to establish that a sufficient tonnage of in-situ coal exists, that the seams of economic interest are of mineable thickness, and that access from the high wall of an initial open pit operation is possible, have been satisfied. Accordingly, follow up work is warranted.

The resources statements prepared by Gemecs are attached as Annexure 1.

Corporate Opportunities

The Company continues to assess and evaluate the acquisition of new assets which will be pursued once the funding for the development of the Moabsvelden project is finalized.

Sale of unmarketable parcels of Xceed shares

During the quarter, Xceed established a sale facility for shareholders holding unmarketable parcels of the Company’s shares, thereby reducing the Company’s ongoing share registry and communication costs, and providing small shareholders with a solution for selling their unmarketable share holdings (share holdings worth less than $500 as at 3 August 2012).

Pursuant to the terms of the sale facility, 854 shareholders who held unmarketable parcels of shares agreed to sell their shares, totaling 781,833 shares, at an average price of 7.55 cents per share. The shares were all purchased by institutional investor, and current Xceed shareholder, Fleming SG capital Special Opportunities Pty Ltd.

Cash on hand

As at 30 September 2012, total cash on hand amounted to $6.5 million.

Plans for December Quarter

During the December quarter the Company intends to:

• Advance indicative bank offers of finance to credit approved status,

• Commence detailed design work in respect of structures and roads on Moabsvelden site,

• Develop OH&S and Environmental Management Plans in preparation for project development,

• Collect bulk sample by means of core drilling for purposes of Eskom combustion tests,

• Continue discussions with Eskom for coal off-take and power supply agreements, and

• Continue negotiations with mining contractors and plant manufacturers.

For further information regarding the Company, please contact the Company on +61 8 9226 0329 or refer to www.xceedresources.com.au (http://www.xceedresources.com.au).

For and on behalf of the Board of
Xceed Resources Limited

Ian Culbert
Managing Director
31 October 2012

Xceed Resources Limited is an Australian based public company engaged in the acquisition of mineral projects in Southern Africa. The Company’s primary focus is the development of coal projects located within South Africa’s premier coal fields, which are supported by established infrastructure and are readily capable of reaching their markets.

The Company’s first project is the Moabsvelden thermal coal project situated in the Witbank coal field. Subject to regulatory approval, Moabsvelden is expected to have a mine life in excess of 14 years with the potential to produce export quality as well as domestic quality thermal coal from an open-cast, low strip mine.

Competent Persons Statement:
Information in this announcement that relates to exploration results and mineral resources in respect of the Roodepoort and Bankfontein thermal coal projects is based on information compiled by Mr Kobus Dippenaar, Pr.Sci.Nat, B.Sc Hons (Geology), GSSA, who is a senior coal geologist at Gemecs (Pty) Ltd who have consulted to the Company. Mr Dippenaar is a member in good standing of the South African Council for Natural Scientific Professions (SACNASP No. 4090079/94) as well as a member of the Geological Society of South Africa. Both organisations are Recognised Overseas Professional Organisations. Mr Dippenaar 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, Mineral Resources and Ore Reserves’. Mr Dippenaar consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.