Black Mountain Resources Limited Quarterly Activities Report – September 2012 The Board of Black Mountain Resources Limited (‘Black Mountain’ or the ‘Company’), the silver focused development company with interests in the US, is pleased to provide the following commentary and Appendix 5B. Highlights • High grade silver results from drilling completed at the Conjecture Silver Project • New mineralisation structure identified with high grades close to surface on Conjecture Shear Zone • Further anomaly targets identified for further test work by geophysical work programs at Conjecture Silver Project and New Departure Silver Project • Completion of $2.3m capital raising pursuant to placement • Mine development on‐going at both Conjecture and New Departure with production scheduled for Q1 2013 • Successful dual listing on AIM • Management team strengthened with the appointment of Shannon Robinson as Executive Director Black Mountain CEO John Ryan, said, “The last three months have been highly significant for Black Mountain, both on a corporate and operational level, and I am very pleased with the progress made to date at both the Conjecture and New Departure Silver Projects in the USA.

High grade silver mineralisation has been confirmed and the potential resource extended through drilling at Conjecture and we have successfully delineated new targets here and at New Departure through geophysical campaigns.

This work, alongside development programs which are now underway following a slight delay in our plans due to new health and safety regulations, have not only progressed us towards near term low cost production, but have also enabled us to demonstrate the opportunities to build the scale and therefore the value in the projects through exploration.”
During the quarter Black Mountain significantly progressed exploration and the development of its Conjecture and New Departure Silver Projects, located in Idaho and Montana respectively.

Maiden drilling at both projects returned high grade silver results with further results expected over the coming weeks. Conjecture Silver Project Due to new federal health and safety regulations introduced across the resource sector, the Company revised its development schedule for the Conjecture Silver Project.

Post quarter end the mine development is back on track following completion of all necessary compliance work. The re‐entry and rehabilitation of the Graham Adit (adjacent to the previously targeted Morris Adit) is currently underway to provide access to historic workings, and the decline will then be constructed to cross cut and access historic working levels.

Cross cuts from the decline to the vein zone are proposed to be driven approximately every 200 feet (61.2m).

Additionally, planned i‐drifting on the vein will enable bulk sample testing of the vein zone as well as delineation of additional potential resource blocks for eventual mining.

The Company has also revised its projected production levels to between 300‐400 tonnes per day (previously 150 tonnes per day) with development to be undertaken on three different headings. Exploration Program During the quarter the Company completed a 16 hole diamond core drill program (1,800m), which was the first exploration drilling undertaken at the Conjecture Silver Project since the 1980s.

The program successfully confirmed the grades and the presence of historic mining blocks identified by previous sampling, exploration and mining undertaken at the property. Significantly, each hole drilled encountered mineralisation structures, although some of the samples are still being processed with final assay results.

The following high grade intercepts, as released on 17 October 2012: • 715g/t of silver (‘Ag’) equivalent intercept over 1.4m (depth of 101m) • 363g/t Ag equivalent intercept over 3.9m (depth of 38m) • 340g/t Ag equivalent intercept over 0.7m (depth of 17m) • 157g/t Ag equivalent intercept over 3.0m (depth of 40m) Full details on the drilling results, including drill hole locations and assumptions for calculating Ag equivalent grades are contained in the Company’s previous release on 17 October 2012 and as set out in Annexure A. During the quarter the Company also commenced a geophysical exploration program, which included an initial Induced Polarity (‘IP’) survey strike line along the Conjecture Shear Zone of approximately 6 kilometres.

A number of target anomalies were identified along the zone which will require further test work.

Desktop modelling and mapping is being undertaken on these results and a program involving cross lines across prospective areas is being planned for Q2 2013.

The IP work continues to develop new potential drilling targets and will require follow up geochemical and structural geology work to be done on the new targets for further development. The data from the drilling and geophysical programs undertaken, combined with the wealth of historic reports and information, will be integral to the Company as it focusses on the successful development of the project with an objective of achieving first production in Q1 2013.
Mill Access During the quarter, the Company entered into an exclusive option for a long term (45 year) lease at the Lakeview Mill and to acquire the historic Weber Mine, both in northern Idaho.

The Lakeview Mill is ideally positioned for near term use by the Company’s Conjecture Project which is only 3.5 kilometres away. The mill has been refurbished and upgraded following the purchase of discounted equipment from a nearby mill resulting in increased capacity to approximately 350 tonnes per day.

The Company has completed due diligence on the Lakeview Mill and the historic Weber Mine and will formalise the acquisition in the coming quarter. New Departure Silver Project Mine development at the New Departure Silver Project in Montana was also delayed due to the introduction of new federal health and safety regulations.

Development work is scheduled to recommence in the next few weeks following compliance approvals with a revised first ore production target of February 2013. It is anticipated that the rehabilitation of the Laczay Adit and Tunnel will be completed in early December 2012.

A 335m decline will then be driven at a 15% decline to access historic workings below the historic blocks known as the Main Zone, additionally allowing access to the Quien Sabe Zones and the Bonzana Zones by way of secondary drifts off the main decline (depicted as numbers 5 and 3 respectively in Figure 1 below).
[cid:image022.png@01CDB815.FEE8DC30]Figure 1: New Departure Patented Claims
[cid:image023.jpg@01CDB815.FEE8DC30] Exploration Program During the quarter drilling at the New Departure Silver Project continued targeting the projected downward dip extension of historic ore shoot and IP anomaly targets identified last year.

Drilling is anticipated to be completed with assay results available this quarter. In addition, further geophysical and structural geological mapping was undertaken on the project.

A number of further IP anomaly targets have been identified over the claims and an additional geophysical and geochemical program is planned prior to drilling prioritised targets in Q2 2013. Tabor Silver and Gold Project Preliminary development activities for the Tabor Silver and Gold Project in Montana are scheduled for Q2 2013 including securing access, general portal repair and development.

Once the portals and tunnels are secured, the Company intends to access the mine openings and commence exploration by way of an initial a sampling and assay program. Corporate During the quarter, the Company successfully dual listed and commenced trading on the London Stock Exchange’s AIM market.

The Company’s ordinary shares trade on AIM under the code “BMZ”. The Company also completed a placement which successfully raising approximately $2.3 million (before costs) during the quarter which will be used to fund development of its assets towards first production in Q1 2013. Subsequent to the quarter end, the Company appointed Ms Shannon Robinson as an executive director of the Board. [cid:image024.jpg@01CDB815.FEE8DC30]The Company also intends to proceed with an ADR listing in the US on the OTCQX in Q4 2012.

For and on behalf of the Board
Peter Landau Executive Director
Annexure A. Conjecture Silver Project Assay Results Hole Northing Easting Azimuth Angle From (m) To (m) Width (m) Grade Drill Pad 1 1 530691 542283 S45E ‐85 NRI 2 530691 542283 S45E ‐70 94.17 1.27 0.6 85.5g/t Ag, 0.72g/t Au, 0.07% Pb, 0.38% Zn (123g/t Ag‐eq) 2 530691 542283 S45E ‐70 101.36 102.74 1.38 692g/t Ag, 0.43g/t Au, 5.66% Pb, 0.39% Zn (715g/t Ag‐eq) 3 Assay results pending Drill Pad 2 4* 5,306,846 542,231 ‐112.9 ‐51.7 100.41 101.00 0.59m 1,106g/t Ag, 0.81g/t Au, 0.65% Pb, 0.23% Zn (1,149g/t Ag‐eq) 5* 5,306,846 542,231 119.4 ‐67.7 122.00 122.32 0.32m 1,060g/t Ag, 0.72g/t Au, 0.56% Pb, 0.53% Zn (1,098g/t Ag‐eq) 6* 5,306,846 542,231 ‐273.3 ‐88.1 236.46 236.82 0.36m 898g/t Ag, 0.47g/t Au, 0.89% Pb, 1.77% Zn (923g/t Ag‐eq) 7 Assay results pending Rainbow Drill Pad 8 5307178 542561 S46E ‐50 36.70 39.73 3.04 90.6g/t Ag, 1.25g/t Au, 0.19% Pb, 0.24% Zn (157g/t Ag‐eq) 9 5307178 542561 S46E ‐70 NRI 10 5307178 542561 S46E ‐85 NRI 11 Assay results pending 12 Assay results pending 13 Assay results pending 14 5307178 542561 S71E ‐50 17.58 18.31 0.73 320g/t Ag, 0.37g/t Au, 0.26% Pb, 0.43% Zn (340g/t Ag‐eq) 14 5307178 542561 S71E ‐50 38.41 42.32 3.91 264g/t Ag, 1.87g/t Au, 0.31% Pb, 0.39% Zn (363g/t Ag‐eq) 15 Assay results pending 16 Assay results pending * Assay results previously disclosed 1.

Intersections were calculated using minimum criteria of 100g/t Ag and Ag equivalent 2.

NRI = no reportable intersection 3.

Ag‐eq (equivalent) grades in this release are gross value equivalents utilising the following metal prices US$33/oz silver price and US$1,740/oz gold price. 4.

These are calculated by gross $ value of any Ag and Au in drill intersections, For the purposes of this release, values have not be attributed to Pb and Zn content. 5.

It should be noted that Ag‐eq is for the purpose of illustrating gross comparative values compared as a ratio to other metals in the drill intersection.
Competent Persons Statement The information included in this release that relates to historical mining data and exploration results is based on information compiled by Mr.

Gregory Schifrin, a technical consultant to the Company.

Mr.

Schifrin has worked as a geologist in exploration and mine development for 29 years in precious and base metal exploration and is a professional member (SME Registered Member) of the Society of Mining, Metallurgy and Exploration (SME) #4053449, a ‘Recognized Overseas Professional Organization’ (‘ROPO’) included in a list promulgated by the ASX from time to time.

Mr.

Schifrin has sufficient experience which is relevant to the style of mineralization 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.

Schifrin has reviewed this release and consents to the inclusion in the release of the matters based on his information in the form and context in which it appears.
For further information please visit www.blackmountainresources.com.au or contact:
Black Mountain Resources Limited Shannon Robinson Executive | Corporate Relations T: +61 (8) 9488 5220 Black Mountain Resources Limited Eva Bezruchko Investor Relations T: +44 (0) 207 025 7040
Broker (Australia) 708 Capital Matthew Lumb T: +61 (2) 9112 2552 Broker (UK) Xcap Securities Jon Belliss T: +44 (0) 20 32162630
Media (Australia) PPR David Tasker T: +61 (8) 9388 0944 Media (UK) St Brides Media & Finance Limited Elisabeth Cowell T: +44 (0) 20 7236 1177
Nominated Advisor (UK) RFC Ambrian Limited Stuart Laing T: +61 (8) 9480 2500
About Black Mountain Resources Limited Black Mountain Resources Limited is a dual listed (ASX | AIM: BMZ) silver and gold focused development company focussed on the advancement of three highly prospective previously operating assets located in two of the world’s most developed and proven silver and gold mining regions of Idaho and Montana, USA. The Company holds a 70% interest in the New Departure Silver Project, the Conjecture Silver Project and the Tabor Gold and Silver Project.

It plans to implement low cost production and development programmes across all three assets, targeting first production from New Departure and Conjecture by Q1 2013.

It is also implementing exploration programmes to capitalise on the exploration upside potential apparent across its portfolio. Black Mountain Resources Limited was incorporated on 29 October 2010 and is listed on the Australian Securities Exchange and London’s AIM Market (BMZ). Appendix 5B Mining exploration entity quarterly report
Appendix 5B Mining exploration entity quarterly report Introduced 1/7/96.

Origin: Appendix 8.

Amended 1/7/97, 1/7/98, 30/9/2001.
[cid:image027.png@01CDB815.FEE8DC30]Name of entity BLACK MOUNTAIN RESOURCES LIMITED Rule 5.3
ABN Quarter ended (“current quarter”) [cid:image029.png@01CDB815.FEE8DC30][cid:image031.png@01CDB815.FEE8DC30]55 147 106 974 30 SEPTEMBER 2012
[Current quarter Year to date $A’000 $A’000 ‐ ‐ (803) (803) (277) (277) ‐ ‐ ‐ ‐ (561) (561) ‐ ‐ 15 15 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Net Operating Cash Flows (1,641) (1,641) Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)equity investments (c) new project acquisition 1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Proceeds from underwriting Net investing cash flows 1.13 Total operating and investing cash flows (carried forward) ‐ ‐ ‐ ‐ (531) (531) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ (531) (531) (2,172) (2,172)]Consolidated statement of cash flows Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) equipment (e) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other Receipts (refunds) 2.7 Other
+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 1 Appendix 5B Mining exploration entity quarterly report
1.13 Total operating and investing cash flows (brought forward)
(2,172)
(2,172)
Cash flows related to financing activities 1.14 Proceeds from raising 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Costs associated with issue of shares Net financing cash flows
2,213 ‐ ‐ ‐ ‐ (146)
2,213 ‐ ‐ ‐ ‐ (146) 2,067 2,067
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter
(105) 3,254 ‐
(105) 3,254 ‐ 3,149 3,149
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 $A000
1.23
Aggregate amount of payments to the parties included in item 1.2
227
1.24
Aggregate amount of loans to the parties included in item 1.10
Nil
1.25
Explanation necessary for an understanding of the transactions
Payments of Directors Fees and Remuneration 52
Payments to Director Related Companies 175
[cid:image038.png@01CDB815.FEE8DC30]Non‐cash financing and investing activities [cid:image040.png@01CDB815.FEE8DC30]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 Nil
[cid:image040.png@01CDB815.FEE8DC30]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 Nil
+ See chapter 19 for defined terms. Appendix 5B Page 2 30/9/2001 Appendix 5B Mining exploration entity quarterly report
Financing facilities available [Amount available $A’000 Amount used $A’000 Nil ‐ Nil ‐]Add notes as necessary for an understanding of the position.
3.1 Loan facilities 3.2 Credit standby arrangements
[$A’000 (250) (1,000) ‐ (300) Total (1,550)]Estimated cash outflows for next quarter 4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration
[Current quarter $A’000 Previous quarter $A’000 5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other – Term Deposit 3,149 3,254 ‐ ‐ ‐ ‐ ‐ ‐ Total: cash at end of quarter (item 1.22) 3,149 3,254]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.
Changes in interests in mining tenements
[Tenement reference Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter Nil None Nil Nil Nil Nil]6.1 Interests in mining tenements relinquished, reduced or lapsed
6.2 Interests in mining tenements acquired or increased
+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 3 Appendix 5B Mining exploration entity quarterly report
Issued and quoted securities at end of current quarter [Total number Number quoted Issue price per security (see note 3) (cents) Amount paid up per security (see note 3) (cents) 7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy‐ backs, redemptions Nil Nil 7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy‐ backs 68,769,792 41,294,792 3,439,791 Nil 3,439,791 £0.155 7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted Nil Nil Nil 7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter 2,000,000 36,156,250 Nil 36,138,750 $0.30 $0.20 Nil Nil Nil Nil Nil Nil 7.11 Debentures (totals only) Nil Nil 7.12 Unsecured notes (totals only) Nil Nil Performance Based Shares 25,000,000 Nil $0.20 Nil Nil Nil]Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Changes during quarter (a) Increases Note – performance milestones for Performance Shares: (a) the Company completing exploration and development on each US Project in the total amount of not less than US$1,500,000, or exploration and development in the amount of US$4,500,000 across all of the US Projects, within three (3) years from the date of issue of the Performance Shares; and
+ See chapter 19 for defined terms. Appendix 5B Page 4 30/9/2001 Appendix 5B Mining exploration entity quarterly report
(b) production from the Project of not less than 2,000 ounces of gold or gold equivalent within five (5) years from the date of issue of the Performance Shares. 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). [cid:image052.jpg@01CDB815.FEE8DC30]2 This statement does give a true and fair view of the matters disclosed.
Peter Landau Executive Director 31 October 2012
+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 5 Appendix 5B Mining exploration entity quarterly report
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 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.
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+ See chapter 19 for defined terms. Appendix 5B Page 6 30/9/2001
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