Hawthorn Resources Limited March 2010 Quarterly Report

ASX Release 29 April 2010 Hawthorn Resources Limited

ABN March 2010 Quarterly Report 44 009 157 439

Hawthorn Resources Limited Level 2, 90 William St Melbourne VIC 3000 Tel: +61 3 9605 5950 Fax: +61 3 9605 5999 Email: [email protected] www.hawthornresources.com

Directors Exploration Highlights for the March 2010 Quarter:

Mr Mark Gregory Kerr (Chairman)  Deep South JV Project, Gold - – gossanous sulphide horizon intercepted along strike of known resource. Mr Mark Edward Elliott (Managing Director)  Mt Bevan Project, Iron Ore - Western Australia – drilling infills and extends extensive magnetite iron formation horizons. Drilling continues.

Dr David Tyrwhitt  Edjudina Mine Project, Gold - Western Australia - Drilling campaign to (Non Exec. Director) commence early May 2010 on high gold grade quartz vein array.

Senior Management  Yundamindera and Melita Projects, Gold – Western Australia – RAB drilling to commence in early June 2010.

Mr Ian Moody (Exploration Manager) INTRODUCTION Mr Mourice Garbutt The Hawthorn Resources Limited group of companies (“Hawthorn”) is an (Company Secretary) Australian diversified base metal and gold explorer with significant strategic tenement holdings throughout the Eastern Goldfields of Western Australia, South Australia and Queensland.

Hawthorn’s aggressive drilling programs planned for 2010 have commenced ASX Symbol: HAW focused on the company’s extensive and prospective gold tenements in close proximity to known gold resources in the South Laverton Gold Zone of Western Australia, and at the Mt Bevan Iron Ore Project in the Central Yilgarn Iron Province of Western Australia.

1 Hawthorn Resources Limited March 2010 Quarterly Report

Mount Bevan Project – Western Australia Hawthorn Resources 100%

The project comprising two tenements E29/510 and E29/713 approximately 100 kilometres west of Leonora, Western Australia which extends northwards along strike from the “Mt Mason Iron Ore Resource” (5.75 Mt @ 59.9% Fe) of Jupiter Mines Limited (‘Jupiter’).

Exploration by Hawthorn at Mt Bevan has identified widespread, outcropping and sub- outcropping haematite and magnetite mineralisation in a package of BIF’s, sediments, and volcanics that extend in a north westerly orientation through the entire strike length of the project area – a distance of over 25 kilometres.

Company’s including Jupiter, Mindax Resources Limited, Cashmere Iron and Cliffs Australia are currently carrying out extensive DSO haematite and magnetite exploration programs on the Mt Bevan – Mt Ida BIF belt and other adjacent BIF belts within the district.

Figure 1. Mt Bevan Area – Location Plan

2 Hawthorn Resources Limited March 2010 Quarterly Report

Hawthorn recommenced RC drilling at Mt Bevan during the quarter. The current program is designed to explore previously untested primary haematite targets in the northern, central and eastern portions of the larger project area and further delineate the thick, strike extensive, magnetite ore identified in previous programs.

These thick magnetite bearing units extend for over 10.0 kilometres of linear strike drilled to date and are interpreted to extend throughout the entire 25.0 kilometres of strike within the Project area. The units have previously returned excellent Davis Tube Recovery concentrates comprising over 69% Fe with low deleterious impurities of Si, Al and P, from weathered near surface portions of the magnetite units.

It is believed that these are analogous to the “Mt Ida Magnetite Zone” of Jupiter Mines Limited approximately 7.0 kilometres south of the Project area. Jupiter has announced a conceptual target of in excess of 1 Billion tonnes of magnetite ore from this area.

Drilling to date in the current program has confirmed that these magnetite units are > 130 metres in true thickness over at least 5.0 kilometres of strike length and imply that a very large tonnage of magnetite material is present within the Project area. Assays from drilling completed are pending.

Drilling has proceeded slowly with only 15 planned holes completed to date due to operational difficulties with the drill rig. The drill rig has subsequently been deployed to Hawthorn’s gold drilling programs in the Deep South and Edjudina Mines areas in the South Laverton Gold Zone.

3 Hawthorn Resources Limited March 2010 Quarterly Report

South Laverton Gold Exploration – Western Australia incorporating Triumph, Savannah, Yundamindera, Pinjin, Melita, Deep South and Trouser Legs Projects (Hawthorn Resources 100%),(Hawthorn Resources 80%, Avoca Resources 20%),(Hawthorn Resources 70%, Gel Resources 30%) . Figure 2 & 3

Figure 2. Eastern Goldfields, Western Australia – Project Locations

Hawthorn Resources’ South Laverton Gold Exploration Zone incorporates five project areas where Hawthorn Resources holds, solely or in joint venture, title to over 100 exploration, mining, and prospecting licences. These tenements cover a mostly contiguous portion of the Eastern Goldfields of Western Australia extending from the south shore of Lake Carey to the historic Pinjin Mining Centre– a strike extent of approximately 125 kilometres.

4 Hawthorn Resources Limited March 2010 Quarterly Report

The South Laverton Zone, with a gold endowment of over 15 Million ounce of gold, hosts major mines and resources including Sunrise Dam, Red October, Carosue Dam, Safari Bore, Deep South and the Porphyry group of deposits.

Drill testing of high priority gold targets within the Deep South and Triumph – Edjudina Project areas has commenced.

Figure 3.Deep South and Edjudina RC drilling – Location

Deep South Project (Hawthorn Resources 80%, Avoca Resources 20%).

The project area lies directly along strike to the south of Deep South Mine approximately 170 km to the north east of Kalgoorlie in Western Australia. The gold mine was operated during 2004 and 2005 by and Mines Limited. Hawthorn holds tenements in this project area in Joint Venture with ASX 200 listed gold producer, Avoca Resources Limited.

5 Hawthorn Resources Limited March 2010 Quarterly Report

The mine is currently owned by Saracen Mineral Holdings Limited (‘Saracen’) and hosts reported opencut and underground Indicated and Inferred Resources of approximately 252,000 ounces of gold from the contiguous Deep South and Mexico orebodies.

Saracen report that ore from the Deep South Mine is scheduled to be incorporated in both Stage 1 and Stage 2 of development and treatment at the Carosue Dam Mill.

Drill testing of targets along strike of the interpreted Deep South - Mexico ore horizon has commenced with 10 holes of a proposed 22 hole program completed.

Hawthorn has intersected a deeply weathered gossan / sulphide horizon of 3-8 metres true thickness in three holes on two sections drilled to date. It is believed that the horizon intersected is similar to the ore horizon mined at Deep South and identified at Mexico.

The sections, approximately 900 and 1100 metres south of the interpreted position of the Deep South – Mexico ore horizon, remain open at depth and along strike.

6 Hawthorn Resources Limited March 2010 Quarterly Report

Figure 4. Deep South RC drilling – Plan View

7 Hawthorn Resources Limited March 2010 Quarterly Report

Figure 5. Deep South RC drilling – Section 6729835 N

Figure 6. Deep South RC drilling – Section 6729640 N

One metre samples of the gossanous horizon have been submitted for Fire Assay with results pending.

Drilling along strike and at depth beneath this horizon is currently underway.

A total of 3.2 kilometres of potential strike exists within the northern portions of the project area - substantial further drilling programs will be required to fully test this potential.

8 Hawthorn Resources Limited March 2010 Quarterly Report

Triumph Project (Hawthorn 100% and Hawthorn Resources 80%, Avoca Resources 20%).

This project area lies approximately 140 km to the north east of Kalgoorlie in Western Australia and 20 kilometres to the east of the operating Porphyry Gold Mine (Saracen Mineral Holdings Limited) and consists of 32 tenements. The tenements within the project area are either held by Hawthorn solely or in Joint Venture with Avoca Resources Limited.

The project area covers numerous historic gold mines developed primarily on high grade quartz lodes, but examples of BIF and intrusive hosted mineralisation are also known.

Historically the majority of gold production within the project area was sourced from a contiguous series of mines located in the Edjudina region of the project. Production from the Neta, Neta Junction, Senate, and Gawler Mines, developed on series of sub-parallel quartz lodes over a strike length of 1.4 kilometres, occurred between 1898-1921, 1936- 1939 and 1979-1983.

Historic reported production from this group of mines is reported as 21,950 tonnes with 33,215 oz of gold produced (List of Cancelled Gold Mining Lease that have produced Gold – Western Australia Department of Mines, 1954. Reprinted 1980).

Some limited development was undertaken during 1979-1983 when Paget Gold Mining Company Limited (“Paget”) dewatered and re-timbered the Neta, Senate and Gawler Shafts. During 1983 Paget issued a Prospectus that reported estimated remnant underground Proven and Probable Reserves in the Edjudina Mine area of 195,500 tonnes @ 12.4 g/t Au. A long section from this Prospectus is produced in Figure 7.

This estimate was made prior to the establishment of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and is clearly non-compliant with the Code.

9 Hawthorn Resources Limited March 2010 Quarterly Report

Figure 7. Edjudina Mine Area – Historic Longitudinal section and proposed May 2010 RC drilling program

Limited exploration has been undertaken since 1983, with all known and located drill holes and assays incorporated in the long section above.

Hawthorn will commence drill testing this prospective mineralised horizon, on tenements held solely by Hawthorn, during May 2010.

Yundamindera Project (Hawthorn 100% and Hawthorn Resources 80%, Avoca Resources 20%).

The Yundamindera Project area is located approximately 175 kilometres to the north east of Kalgoorlie, Western Australia. It is located to the immediate south west of the historic Butcher Well Gold Mine in an area where shear, BIF and syenite intrusive gold mineralisation is well known.

Approval to commence a 4000 metre RAB drilling program on compelling structural and geochemical targets within the Project area has been received during the quarter. This program is planned to commence during June 2010.

Melita Project (Hawthorn Resources 100%)

The Melita Project area is centred to the west of the historic Kookynie – Orient Well Mining centre, approximately 50 kilometres to the south east of Leonora in the Eastern Goldfields of Western Australia. The mining centre has produced an estimated historic production of 0.6 Million ounces gold whilst remnant resources in the district are reported to be in excess of 0.4 Million ounces gold.

Hawthorn Resources holds 42 granted Exploration and Prospecting Licences throughout this district covering over 150 km² of ground prospective for both gold and potential base metal mineralisation.

10 Hawthorn Resources Limited March 2010 Quarterly Report

A planned RAB drilling program designed to test high tenor Au-in-soil anomalies has been rescheduled until June 2010 to follow on from RAB drilling to be carried out in the Yundamindera Project area.

Trouser Legs Project (Hawthorn Resources 70%, Gel Resources 30%) incorporating the Anglo Saxon gold project. Figure 3.

The project area is situated approximately 140 kilometres east of Kalgoorlie, and 35 kilometres to the east of the Carosue Dam Operation of Saracen Mineral Holdings Limited.

Limited exploration was completed during the quarter, however a series of RC drill holes is planned for May 2010 beneath the Wessex, Exile and Exile North prospects where shallow RAB drilling late in 2009 returned results including

 PSB013 - 12 metres @ 1.38 g/t Au from 40 metres o including 4 metres @ 3.23 g/t Au, (Wessex)

 PSB056 - 36 metres @ 1.26 g/t Au from 8 metres o including 16 metres @ 2.16 g/t Au from 8 metres (Exile North)

 PSB041 - 13 metres @ 1.68 g/t Au from 32 metres to EOH o including 4 metres @ 4.12 g/t Au (Exile North)

 PSB063 - 8 metres @ 3.76 g/t Au from 8 metres o including 4 metres @ 7.08 g/t Au (Exile)

11 Hawthorn Resources Limited March 2010 Quarterly Report

Figure 8.Trouser Legs JV – Prospect Location on Aeromagnetics

The planned RC drilling is scheduled to occur upon completion of RC drilling in the Deep South and Triumph – Edjudina Project areas

Clarke River Uranium Exploration – Queensland (Northern Resources Australia - 100% owned subsidiary of Hawthorn Resources)

Limited exploration was carried out in this area 150 kilometres west of Townsville, Queensland during the quarter following the onset of the northern wet season.

A reassessment of the most recent drilling program completed in November 2009 has focused on holes that intercepted the target stratigraphy – a pebbly quartz sandstone beneath thick tuffaceous units, with strong scintillometer readings, but patchy U assays. It is believed that the original U mineralisation may have been re-mobilised from the target horizon and future exploration will target potential structural traps in the vicinity.

With an increasing focus on the gold and iron ore assets within Hawthorn Resources portfolio, a farm-out of this project area is under consideration.

12 Hawthorn Resources Limited March 2010 Quarterly Report

Joint Ventures

Lake Rebecca Joint Venture – Western Australia (Newmont Australia 90%, Hawthorn Resources 10%).

This joint venture between Newmont Australia and Hawthorn Resources covers tenements within the Wild Dog Dam Project area on the southern margin and within Lake Rebecca, Western Australia.

Newmont reports that no exploration was completed during the quarter and that divestment from this project area is likely to proceed in the upcoming quarter.

Erayinia Joint Venture – Western Australia (ABM Resources 70%, Hawthorn Resources 30%).

The Erayinia Joint Venture is centred approximately 130 kilometres south east of Kalgoorlie, Western Australia. The joint venture is managed by ABM Resources NL (“ABM”) and have earned 70% equity in the project area by exploration expenditure.

ABM report that the project is currently on care and maintenance and that the company is assessing options for further exploration targeting or divestment of this project.

Whiteheads Joint Venture – Western Australia (Quantum Resources 80%, Hawthorn Resources 20%).

Quantum Resources have reported that no work was undertaken on the Whiteheads JV tenements during the quarter.

East Kimberley Joint Venture – Western Australia (Thundelarra 80%, Pindan – Panoramic Resources earning to 48.8% of Thundelarra interest, Hawthorn Resources 20%)

Panoramic Resources have reported that no new exploration was undertaken on the East Kimberley Joint Venture during the quarter.

Mt Carulina – South Australia

Hawthorn has relinquished the tenement subsequent to the end of the quarter.

Mt. Sarah & Mt. Narlee - South Australia

Hawthorn has relinquished the tenement subsequent to the end of the quarter.

Mourice R Garbutt Company Secretary

13 Hawthorn Resources Limited March 2010 Quarterly Report

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Ian Moody, who is a member of the Australasian Institute of Mining and Metallurgy and a full time consultant geologist with First Principle Mineral Exploration Company Pty Ltd. Mr Moody has sufficient experience as a geologist which is relevant to the style of mineralization and the 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 of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Moody consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Attached is a copy of the Company’s Mining Exploration Entity Quarterly Report in accordance with Listing Rule 5.3.

14 Appendix 5B 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, 30/9/2001.

Name of entity HAWTHORN RESOURCES LIMITED

ABN Quarter ended (“current quarter”) 44 009 157 439 31 March 2010

Consolidated statement of cash flows Current quarter Year to date Cash flows related to operating activities (9 months) $A’000 $A’000 1.1 Receipts from product sales and related debtors - -

1.2 Payments for (a) exploration and (445) (1,324) evaluation (b) development - - (c) production - - (d) administration (189) (851) 1.3 Dividends received - - 1.4 Interest and other items of a similar nature 36 67 received 1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other (provide details if material) - GST (Refundable) 153 172

Net Operating Cash Flows (445) (1,936)

Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects - - (b) equity investments - - (c) other fixed assets - -

1.9 Proceeds from sale of: (a) prospects - 28 (b) equity investments - 557 (c) other fixed assets - -

1.10 Loans to other entities - - 1.11 Loans repaid by other entities - - 1.12 Other (provide details if material) - -

Net investing cash flows - 585 1.13 Total operating and investing cash flows (445) (1,351) (carried forward)

+ 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 (445) (1,351) (brought forward)

Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. - 2,636 1.15 Proceeds from sale of forfeited shares - - 1.16 Proceeds from borrowings - - 1.17 Repayment of borrowings - - 1.18 Dividends paid - - 1.19 Other (provide details if material) - - - 2,636 Net financing cash flows

Net increase (decrease) in cash held (445) 1,285

1.20 Cash at beginning of quarter/year to date 3,628 1,898 1.21 Exchange rate adjustments to item 1.20 - - 3,183 3,183 1.22 Cash at end of quarter 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 $A'000

1.23 Aggregate amount of payments to the parties included in item 1.2 136

1.24 Aggregate amount of loans to the parties included in item 1.10 -

1.25 Explanation necessary for an understanding of the transactions

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

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

+ See chapter 19 for defined terms.

Appendix 5B Page 2 30/9/2001 Appendix 5B Mining exploration entity quarterly report

Financing facilities available Add notes as necessary for an understanding of the position.

Amount available Amount used $A’000 $A’000 3.1 Loan facilities

3.2 Credit standby arrangements

Estimated cash outflows for next quarter $A’000

4.1 Exploration and evaluation 500

4.2 Development -

Total 500

Reconciliation of cash Reconciliation of cash at the end of the quarter (as Current quarter Previous quarter shown in the consolidated statement of cash flows) to $A’000 $A’000 the related items in the accounts is as follows. 5.1 Cash on hand and at bank 173 418

5.2 Deposits at call 3,010 3,210

5.3 Bank overdraft - -

5.4 Other (provide details) - -

Total: cash at end of quarter (item 1.22) 3,183 3,628

Changes in interests in mining tenements

Tenement Nature of interest Interest at Interest at reference (note (2)) beginning end of of quarter quarter 6.1 Interests in mining tenements relinquished, reduced or lapsed See Attached

6.2 Interests in mining tenements acquired or increased See Attached

+ 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 Description includes rate of interest and any redemption or conversion rights together with prices and dates.

Total number Number quoted Issue price per Amount paid up per security (see note security (see note 3) 3) (cents) (cents) 7.1 Preference +securities - - - - (description) 7.2 Changes during quarter (a) Increases - - - - through issues (b) Decreases through returns - - - - of capital, buy- backs, redemptions 7.3 +Ordinary securities 1,525,595,897 1,525,595,897 - -

7.4 Changes during quarter (a) Increases through issues - - - - (b) Decreases through returns - - - - of capital, buy- backs 7.5 +Convertible debt securities - - - - (description) 7.6 Changes during quarter (a) Increases - - - - through issues (b) Decreases through securities - - - - matured, converted 7.7 Options Exercise price Expiry date (description and 10,000,000 - $0.10 25 January, 2018 conversion 2,500,000 - $0.10 30 June, 2018 factor) 13,716,713 13,716,713 $1.25 22 September, 2010 13,569,422 13,569,422 $0.20 30 April, 2012 165,084,231 165,084,231 $0.10 28 February, 2013 7.8 Issued during - - - - quarter 7.9 Exercised during - - - - quarter

7.10 Expired during - - - - quarter

7.11 Debentures - - (totals only) 7.12 Unsecured notes (totals - - only)

+ See chapter 19 for defined terms.

Appendix 5B Page 4 30/9/2001 Appendix 5B 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 4).

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

Sign here: ...... Dated: 29/04/2010 (Company secretary)

Print name: MOURICE GARBUTT

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.

======

+ See chapter 19 for defined terms.

30/9/2001 Appendix 5B Page 5

Appendix 5B Mining exploration entity quarterly report

HAWTHORN RESOURCES LIMITED ACN 009 157 439 CHANGES IN INTERESTS IN MINING TENEMENTS

6.1 Interests in Mining Tenements relinquished, reduced or lapsed

Tenement Nature of Interest at Interest at Interest [note (4)] beginning end of Reference of quarter quarter

E31/794 Application Withdrawn 100% 0% E31/763 Application Withdrawn 80% 0% E31/852 Application Withdrawn 70% 0% M31/390 Application Withdrawn 100% 0% M31/433 Application Withdrawn 100% 0% P31/1911 Application Withdrawn 100% 0% P31/1877 Application Withdrawn 100% 0% P31/1878 Application Withdrawn 100% 0% E28/1564 Surrendered 100% 0% E28/1565 Surrendered 100% 0% E28/1742 Surrendered 100% 0% E28/970 Surrendered 100% 0% E31/701 Surrendered 100% 0% E37/536 Surrendered 100% 0% E39/1046 Surrendered 100% 0% E39/911 Surrendered 100% 0% M24/629 Surrendered 1.5% NSR 0% M31/474 Surrendered 100% 0% M40/297 Surrendered 100% 0% P28/1083 Surrendered 100% 0% P28/1096 Surrendered 100% 0% P28/1137 Surrendered 100% 0% P28/1138 Surrendered 100% 0% P28/1139 Surrendered 100% 0% P31/1807 Surrendered 100% 0% P31/1810 Surrendered 100% 0% P37/1811 Surrendered 100% 0% P39/4861 Surrendered 100% 0% P39/4862 Surrendered 100% 0% P39/4863 Surrendered 100% 0% P39/4864 Surrendered 100% 0% P39/4865 Surrendered 100% 0% P39/4866 Surrendered 100% 0%

+ See chapter 19 for defined terms.

Appendix 5B Page 6 30/9/2001 Appendix 5B Mining exploration entity quarterly report

HAWTHORN RESOURCES LIMITED ACN 009 157 439 CHANGES IN INTERESTS IN MINING TENEMENTS

6.2 Interests in Mining Tenements acquired Or increased

Tenement Nature of Interest at Interest at Interest [note (4)] beginning end of Reference of quarter quarter

E40/287 Application 0% 100% M31/327 Granted 0% 70% M31/328 Granted 0% 70% P40/1248 Granted 0% 100% P40/1249 Granted 0% 100%

+ See chapter 19 for defined terms.

30/9/2001 Appendix 5B Page 7