C O R P O R A T E D I R E C T O R Y

Company Secretary – Julie Hill

Stock Exchange Listing:

Australian Securities Exchange Code: HDG

Solicitors:

Cardinals Ground Floor, 57 Havelock Street West Perth WA 6005

Auditors

Nexia Perth Level 7, The Quadrant 1 Willliam Street Perth WA 6000

Share registry

Advanced Share Registry Services 110 Stirling Highway Nedlands WA 6009 Telephone (08) 9389 8033

Facsimile (08) 9389 7871

ASX Code: HDG Fully paid shares: 80,254,029 Unlisted options:

10,525,000

HE AD OFFICE

Level 2, 38 Richardson St

West Perth, WA 6005

Telephone : (08) 9322 6412

Facsimile : (08) 9322 6398

Email : info@hodgesresources.com.au

BO ARD MEMBERS

Peter Mullens – Chairman

Mark Major – Managing Director

Nathan McMahon – Non-Exec Director

Bryan Dixon – Non-Exec Director

QUARTERLY REPORT FOR 30 JUNE 2012

www.hodgesresources.com.au

2.3 billion tonne JORC Inferred Resource

Upgrade at Morupule South.

1.2 billion tonnes potentially amenable to open

cut mining methods at Morupule South

Indicative product seam yields up to 51%

delivering product 14.5% ash & 6,200Kcal/kg for

the Bottom Morupule Seam.

Completion of transfer of the ownership of

Ghana projects to Hodges

Cash reserves of $1.6 million at end of June

quarter

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SUMMARY OF CORPORATE ACTIVITES

At the end of the June quarter 2012, Hodges Resources Ltd (‘Hodges’ or the ‘Company’) had cash reserves of approximately $1.6 million with a further $3.7 million in receivables (under terms and conditions of commercial agreements in relation to the Botswana and Ghana projects).

Hodges’ current market capital is $12.3 million.

The Company recently presented at the Botswana Resource Sector Conference in Botswana. Mr Major noted that the interest in the Botswana coal sector continued to increase and that the event was successful in promoting the Company to numerous African government representatives and the broader market.

During the quarter, the Company announced the appointment of Ralph Rossouw to the position of Technical and Operations Manager. Mr Rossouw has been unable to commence work with Hodges to date due to unforeseen personal circumstances.

PROJECT ACTIVITES UPDATE

MORUPULE SOUTH COAL PROJECT

The Company was extremely satisfied with the outcomes from its range of activities at the Morupule South project. The Morupule South Coal Project is located to the south of the operational Morupule Colliery in central east Botswana. The project consists of one prospecting licence (PL121/2010), covering a total area of 264.4km2 within the eastern central district of Botswana.

As stated in the ASX announcement dated 25 June 2012, the coal resource upgrade increased by 485% on the initial maiden inferred resource with the Morupule Main Seam representing 83% of the resource. The updated resource was compiled after Hodges had completed an additional 52 holes including 15 diamond drill holes (2,076 meters) and 37 reverse circulation (RC) open holes (5,070 meters).

Figure 1: Location of Resource Zones in PL121, Morupule South Project.

2.3 billion tonne JORC (2004) compliant

Inferred Resource with the Morupule Main

Seam representing 83% of the resource.

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There are up to four main coal seams occurring within the resource area PL121 known as Morupule South. The typical sequence of coal seams are the Serowe Bright Seam (SSB), followed by the Lotsane Bright Seam (SLB), the No.2 Seam (S2B) then the thicker Morupule Main Seam (SMM); which has been broken down into two separate sub seams, namely the Top Morupule Seam (SMT) and Bottom Morupule Seam (SMB). The coal seams are considered relatively flat. Average seam thickness ranges from 0.6m for the SSB seam, 2.6m for the SLB seam, 1.9m for the S2B seam,10.3m for the SMT seam, and 7.3m for the SMB seam. Refer to Table 1.

Table 1: PL121 Morupule South Resource and Raw Coal Quality.

SEAM NAME

GROSS INSITU TONNES

RAW COAL QUALITIES (AIR DRIED)

Ave Seam TK

CV (Kcal/kg)

Ash (%)

Inherent Moisture

(%)

Volatile Matter

(%)

Fixed Carbon

(%)

Total Sulphur

(%)

SSB 1.0 MT 0.6 4,346 34.2 3.1 29.6 33.8 1.84

SLB 319 MT 2.6 4,442 35.3 3.5 25.1 36.1 2.25

S2B 35 MT 1.9 4,069 38.6 4.1 21.2 36.2 1

SMT 1,010 MT 10.3 4,083 38.2 3.9 20.1 37.8 0.87

SMB 965 MT 7.3 4,967 29.6 3.7 20.2 46.6 1.13

Total 2,330 MT

The coal resource area was subdivided into potential open cut and underground areas (refer Figure 1 & ASX announcement on 25th June 2012). A strip ratio cut off at 3:1 was used as a guideline to determine the split between opencast and underground areas. In addition, the underground area is generally deeper than 100m below surface (for the Morupule Main seam). The opencast areas were subdivided into 3 areas, based on possible major faults & structural domains.

Coal seams thinner than 50cm, as well as coal with a raw ash of >45% were excluded from the resource estimation reporting.

Three of these zones including the East, Central & West exhibit indicative Insitu Coal: Overburden ratios amenable to Conventional Open Cut Mining practices, ranging from 1.7 to 2.7. Within the current JORC (2004) 2.3 billion tonnes Inferred Resource up to 1.2 billion tonnes may be amenable to open cut mining.

Washing test work was undertaken on 11 of 15 diamond bore core holes to date. Results from outstanding holes are envisaged to be completed in Q2 2012.

Bore Cores samples with a Seam Raw Ash <40% were selected for further float sink washability test work. Indicative Washed product yields and quality are described in Table 3 of our ASX announcement dated 25 June 2012. Indicative Yields and Product qualities are very encouraging and higher than previously anticipated, with the key results as follows:

Product of 5,731 Kcal/kg (24Mj/kg) with approximately 20% produced indicative seam yields of 75% and 78% from the SLB and SMB seams respectfully.

Products of 5,970Kcal/kg (25Mj/kg) with around 17% ash produced indicative seam yields of 66% from the SLB and SMB seams.

Product of 6,209 Kcal/kg (26Mj/kg) with <15% ash produced indicative seam yields of 56% and 51% from the SLB and SMB seam respectfully.

1.2 billion tonnes potentially

amenable to open cast mining.

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Product of 6,448 Kcal/kg (27Mj/kg) with 13% ash produced an indicative seam yield of around 44% from the SLB seam.

The company is now focussing on the economic viability studies of mine and power integration. This will take Hodges one step closer to the decision to develop the coal mine.

The Company aims to complete concept studies and commence prefeasibility studies on various mine and integrated power projects before the end of the year.

MOIYABANA COAL PROJECT

The Moiyabana project (PL93/2007 and PL94/2007) is located approximately 70km from the operational Morupule mine and Colliery; the only operational coal fired power plant in Botswana. Historically the area was partially explored by Shell Coal Botswana during the 1970’s Jaquar Ventures (Pty) Ltd, who completed thirteen diamond drill holes during the period 2009-2010.

Based on the results of the Runge Independent geological report as reported in an ASX announcement on 7th June 2011, a coal exploration target of around 1.4 to 1.6 billion tonnes could be defined in the 140km2 area of which an estimated 660 million tonnes indicates suitability for open cast mining.1

Seam Thickness CV

(Mj/kg) Ash (%)

H2O (%)

Vols (%)

Total S (%)

Upper seam s 4.7 to 23.7 Lower seam 2.5 to 8.4

19.82-25.24 22.86-33.72 4.5-6.6 23.44-34.43 0.29-0.61

Hodges had previously stated that the Company expects to have its maiden JORC resource on the project in Q2 2012. However due to unforeseen and continued delays with the laboratories beyond the Company’s control, Hodges now anticipates that the Maiden JORC resource will be released in Q3 2012.

GHANA – SALMAN SOUTH AND MAME PROJECTS

In May 2010, Hodges reached an agreement to acquire a 90% interest in the Salman South and Mame Gold projects located in the southern extensions of the Ashanti Gold Belt, southern Ghana.

The Salman South project is a strategic land holding located approximately 1.5km south of the Adamus Resources ~2.1Moz Nzema Gold Project. The Mame project is located 8km south east of Salman south and 2km south of Adamus Resources Avrebo prospect.

Hodges completed the share sale agreement with Wells Gold and the Company now has the rights to 90% of the project, and is well placed to proceed with exploration of the projects in Ghana.

As reported on 7 November 2011, multiple coherent gold anomalies have been identified following the completion of a systematic soil sampling program at the Company’s Salman South and Mame gold exploration projects of which are located along strike from Adamus Resources’ Nzema and Avrebo gold projects.

Hodges is currently waiting for approvals to commence initial drilling at these two projects.

1 The stated Exploration Target above and the coal quality must be regarded as a provisional indication of likely tonnages and qualities only. It is through this exploration the Hodges intends to upgrade this target to a JORC Resource within the next 2 months. The Exploration Target is conceptual in nature and there has been insufficient exploration to define a Mineral Resource.

Indicative product seam yields up to 51%

delivering product 14.5% ash &

6,200Kcal/kg for the

Bottom Morupule Seam.

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SWEDEN

The Company maintains an interest in four uranium projects located in Sweden. Projects are held either outright or through strategic joint ventures agreements with TSX listed Mawson Resources.

Hodges has now successfully completed its farm-in requirements under the terms of the joint venture agreement and is entitled to 51% interest. Hodges can earn additional interest in projects by sole funding any project to bankable feasibility level.

Work completed on the projects to date has included; ground prospecting, prospect scale mapping, ground scintillometer and ground magnetic surveying, radon cup surveying and diamond drilling.

No work was completed during the last quarter. The Company anticipates doing further exploration in the next 6 months; once renewals are complete on several of the projects.

For Further Information Please contact Mark Major should you have any queries on this announcement. Telephone: (+618) 9322 6412 Email: info@hodgesresources.com.au For Media Enquires Please contact Fortbridge on +612 9003 0477 Jeff Coote +61 404 275 665 / Bill Kemmery +61 400 122 449 DISCLAIMER The stated exploration target above must be regarded as provisional indication of likely tonnages and qualities only. However Hodges does intend to review and upgrade this target to JORC standards within the next 2 months. The exploration target is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Competent Persons Statements The information contained in the report that relates to Exploration Results, Exploration Targets detailed in the Moiyabana Coal project and the Morupule South Coal Project, is based on information reviewed by Mr. Jeff Claeys, who is an independent consultant for the Company. Mr. Claeys is a Member of the Geological Society of South Africa and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken 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. Claeys has given consent 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 the Inferred JORC Coal Resources was compiled by GEMECS (Pty) Ltd and is detailed in a report dated 11 March 2011. The competent person with overall responsibility for the reporting of the Coal Resources is Nico J Denner, Pr.Sci Nat, B.Sc Hons (Geology) of GEMECS (Pty) Ltd who is a fellow of a Recognised Overseas Professional Organisation, the Geological Society of South Africa. Nico Denner 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 Denner 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 the Ghana and Sweden projects Exploration Results is based on information compiled by Mr Mark Major, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Major 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 Major consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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