MARCH 2012 QUARTERLY REPORT Highlights

BRYAH BASIN COPPER PROJECT

Agreement finalised to acquire tenements from Grosvenor; Alchemy’s

landholding in Bryah Basin doubles to 630km2

Copper-gold targets identified through review of exploration data across

under-explored Grosvenor tenements, including VTEM anomalies within

prospective Narracoota volcanics (host to DeGrussa copper-gold deposit)

Field mapping identifies multiple horizons prospective for base metal

mineralisation adjacent to Horseshoe Lights copper-gold mine – historic

exploration returned strong near surface copper-gold anomalism

Targeted drill testing commences of priority AMT anomalies at East

Magnus – base metal anomalism intersected in RC pre-collars

Geochemical sampling programs to commence on priority areas of

Grosvenor tenements

GASCOYNE GOLD PROJECT

Depth continuity of gold mineralisation at Hermes confirmed from RC

drilling program – best intersection of 18m @ 9.79g/t gold, including 5m

@ 32.1g/t gold, in TRC351

RC drilling program at Central Bore prospect commenced in late March

testing down plunge continuation of high grade gold mineralisation

CORPORATE

Rights issue raises $4.2 million (before costs) completed 24 February 2012

$5.2 million cash at hand at 31 March 2012

BOARD OF DIRECTORS Mr Oscar Aamodt Non-Executive Chairman

Ms Sofia Bianchi Non-Executive Director

Mr Lindsay Dudfield Non-Executive Director

Mr Anthony Ho Non-Executive Director

ISSUED CAPITAL

SHARES 156,852,955

OPTIONS 4,200,000 (Unlisted)

PROJECTS

BRYAH BASIN COPPER (80-100%)

GASCOYNE GOLD (100%)

MURCHISON (80-100%)

Level 2/72 Kings Park Road WEST PERTH WA 6005 Phone: +61 8 9481 4400 Facsimile: +61 8 9481 4404

www.alchemyresources.com.au

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Bryah Basin Copper Project

The Bryah Basin Copper Project covers over 45km strike length of volcanic and sedimentary rocks in the highly-

prospective Bryah Basin, located 130km NE of Meekatharra, Western Australia (Figure 1). Alchemy is undertaking

systematic exploration for base and precious metals mineralisation across the project, which is along strike and to

the west of Sandfire Resources’ DeGrussa deposit (Measured, Indicated and Inferred Resources of 14.33Mt at

4.6% Cu and 1.6g/t Au).

Alchemy is focussed on unlocking the copper-gold potential of its Bryah Basin Copper Project through employing

innovative geophysical and geochemical methods in conjunction with drill testing of priority targets.

Grosvenor Gold tenement package

On 1 March 2012 Alchemy finalised a series of agreements with Grosvenor Gold Pty Ltd (“Grosvenor”) that

substantially increases the Company’s landholding in the highly prospective Bryah Basin to over 630km2 and

provides an additional 25km of strike extent to Alchemy’s previous >20km of Narracoota Volcanics, the host

sequence to the DeGrussa deposit (Figure 1).

Alchemy’s geological team is reviewing all geological and exploration data received through the acquisition of the

Grosvenor tenements. Overall, there has been limited historic exploration for base metals on the acquired

tenements, with the majority of exploration focussed on gold with few drill holes assayed for elements other than

gold.

Figure 1: Prospective Narracoota stratigraphy highlighted on Alchemy tenements.

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Of particular interest are the results of helicopter-borne versatile time-domain electromagnetic (VTEM) surveys

conducted by CSA Global in 2011 on behalf of the previous owner, Grosvenor, over parts of the tenements

containing the prospective Narracoota volcanic sequence. Only a first pass interpretation of the VTEM and

magnetic data has been completed to date with further work required to properly assess a number of late time

anomalies delineated within the Narracoota volcanics and to identify further anomalous responses.

The higher priority targets will be followed up with further ground based geophysical surveys, such as moving

loop EM (MLEM) and fixed loop EM (FLEM), to test these late time VTEM targets. MLEM and/or FLEM traverses

over these targets could confirm the presence of conductors, and generate more accurate targets for drill testing.

In the forthcoming period, further interpretation of all available data will be undertaken to identify further targets

and re-evaluate the lower priority targets. This involves reprocessing the VTEM and magnetic data from the

Grosvenor’s Fiddler, Durack, PHA and PHB surveys and conducting a more extensive review of all available

information.

Field mapping has commenced over priority areas on the acquired tenements bordering the Horseshoe Lights

copper-gold mine (Figure 2) with multiple gold and base-metal prospective horizons identified in the upper 800-

1200 metres of the Narracoota volcanic sequence, hosted by a complex mixture of felsic and mafic volcanic and

related clastic and chemical sedimentary rocks. These horizons, up to seven (7) kilometres in length, likely

represent VMS-style mineralisation, based on their polymetallic character, stratiform geometry, host rock

characteristics and alteration styles. Horizons containing intensive alteration and copper oxide minerals have

been identified at several localities.

Figure 2. Location of Bryah Basin and Gascoyne deposits and prospects.

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Previous drilling was shallow, mostly less than 100 metres depth, and with many drill holes assayed for gold only.

Where assayed, base metal anomalism is recorded in several areas including the Fiddlers, Motters B and Fiddlers

South prospects (Figure 2). The best historic results include:

Fiddlers prospect:

24m @ 0.29g/t Au, 718ppm Cu from 10 m (partial Cu assays), including 4m @ 0.94g/t Au, 1,930ppm Cu

from 20m, in FB84

12m @0.97g/t Au, 174ppm Cu from 24 m, including 2m @ 2.95g/t Au, 700ppm Cu from 30m, in FB122

12m @ 0.47g/t Au, 685ppm Cu from 8m in FB81

Fiddlers South prospect:

10m @ 0.03g/t Au, 2,314ppm Cu, 251ppm Pb, 1,128ppm Zn from 90 m in FP37

6m @ 0.77g/t Au, 1,069ppm Cu, 1,008ppm Pb, 427ppm Zn from 27 m in HAP20 (partial Au assays)

14m @ 0.32g/t Au from 46 m to EOH (no base metal assays)

Multi-element surface geochemistry is available over only a portion of the acquired tenements. In the

forthcoming period the Company will focus on the acquisition of multi-element geochemistry, including base

metal and pathfinder elements, over priority parts of the acquired tenements containing prospective Narracoota

stratigraphy to complement the existing gold-focussed geochemical database.

Audio-Magnetotellurics Survey

An audio-magnetotelluric (AMT) survey completed in November 2011 over the East Magnus project area (Figure

3) indicated a number of anomalies at depth within the Narracoota volcanic sequence (Figure 1) that may

represent massive sulfide lenses. The AMT method has the capability of ‘seeing’ deeper into the prospective rock

package than the previous helicopter-borne VTEM and ground electromagnetic surveys.

The AMT survey forms part of Alchemy’s R&D plan to develop effective exploration methods for both geological

mapping purposes and to detect discrete conductors that may represent massive sulfide targets not detected or

resolved by previous geophysical surveys. The AMT survey also seeks to define deeper structures that may

represent fluid pathways.

RC and diamond drilling of high priority targets generated from the Stage 1 AMT survey commenced in March

2012 (Figure 3).

Two priority AMT anomalies are being drilled tested by a combination of RC pre-collars and diamond core tails. An

RC pre-collar has also been drilled into a third AMT anomaly on the eastern edge of the Bryah Basin project area,

adjacent to Sandfire’s Doolgunna project, in an area close to where a shallow RC drill-hole tested a surface base

metal anomaly in 2010.

Significant base metal anomalism has been encountered in several of the holes drilled to date with portable XRF

surveying returning 5m @ 0.14% Cu from 127m (including 1m @ 0.4% Cu) from a zone of altered mafic volcanics

with up to 5 percent disseminated sulfides in the pre-collar of MGDD005. The zone also contained 2m @ 0.17% Zn

from 130m with a broader zone of copper anomalism (15m @ 400ppm Cu from 169 m) intersected further down-

hole. Assays of the mineralised zones are expected to be completed in the next month.

Down-hole EM (DHEM) surveys of the drill holes were completed subsequent to the end of the quarter to

delineate conductors off hole. Processing of the data is currently being completed with the aim of identifying

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conductors that may be related to massive copper-gold sulfides along strike and down dip from the base metal

anomalous zones.

In parallel with the DHEM survey, Alchemy is re-evaluating the results from all previous geophysical surveys

(VTEM, MLEM and DHEM) with the aim of identifying further untested targets. Other ground based

electromagnetic techniques, such as FLEM, are also being evaluated.

Figure 3: Bryah Basin Copper Project – targeted drilling program of AMT anomalies over VTEM Channel 20 image.

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Gascoyne Gold Project

The Gascoyne Gold Project covers over 600km2 within the highly-prospective Marymia Inlier and Bryah Basin,

located 130km north-east of Meekatharra, Western Australia (Figure 1). The project comprises the Hermes and

Wilgeena Gold Deposits, the Central Bore Prospect and the acquired Grosvenor tenements represent a significant

additional under-explored area prospective for gold mineralisation.

Indicated Mineral Resources at the Gascoyne Gold Project total 246,000oz of gold, contained at the Hermes and

Wilgeena deposits. Alchemy has a goal of increasing its gold resources whilst continually evaluating opportunities

to commercialise these assets.

Hermes Gold Deposit

An Indicated Resource of 2.79 Mt at 2.19 g/t gold (equivalent to 196,650 oz of gold) has been estimated for the

Hermes Gold Deposit (reported in ASX Announcement dated 13 September 2011).

The resource consists of five areas of gold mineralisation – Trapper, Trapper West, Hawkeye, Winchester and

Blake (Figure 4). Gold mineralisation is associated with stacked zones of quartz veining and/or sulfides within

meta-sedimentary units and amphibolites and is characterised by the presence of robust high-grade zones.

A 12-hole extensional RC drilling program at Hermes was completed in December 2011. The program drill tested

high-grade gold intersections at depth in four areas – Hawkeye, Trapper, Trapper West and Winchester.

Assay results have now been received for all 1m split samples (including screen fire assays for selected high grade

samples) and highlight the depth continuity of many of the high-grade ore zones (see Table 1 for significant

intervals).

Results include gold intersections (applying a 0.40g/t lower cut-off and a maximum of 2m of internal dilution) of:

18m @ 9.79 g/t from 107m, including 5m @ 32.1 g/t from 110m, and 1m @ 13.4 g/t from 173m in TRC351

10m @ 3.05 g/t from 154m in TRC352, and

3m @ 4.82 g/t from 138m and 25m @ 1.57 g/t from 168m, including 1m @ 11.95 g/t from 169m, in TRC343.

The results indicate that mineralisation is open at depth and further drilling has good potential to add to the

known resource and expand the area of gold mineralisation outside of the current Indicated Resource.

Central Bore Gold Prospect

Previous drilling by Alchemy in the central part of the Central Bore area has resulted in the discovery of high-

grade gold mineralisation related to quartz veining in granite (reported in ASX announcements dated 10

December 2010 and 15 July 2011). The majority of the high-grade intervals of up to an ounce-per-tonne (including

4m @ 25.8g/t Au from 125m in CBDD002; 15m @ 4.89g/t Au from 96m in CBRC011 and 9m @ 7.19g/t Au from

35m and 9m @ 7.82g/t Au from 49m in CBRC004) appear to have some continuity within broader zones of low-

grade (<1g/t Au) mineralisation.

An 18-hole RC drilling program commenced at Central Bore in March 2012. The drilling program is testing for

down plunge extensions of the gold mineralisation at depth. Results from the program are expected within six

weeks.

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Regional assessment

Regional assessment of the Gascoyne Gold project continued in the March quarter. Historic gold exploration of

the ground recently acquired from Grosvenor is limited, with best results returned from the Henry-Border and

Jones prospects, to the south of the Hermes deposit, within the Peak Hill Schist. Previous drilling has intersected

high grade gold mineralisation at the Jones prospect, including:

3m @ 250g/t from 27m in OPAC126

3m @ 41g/t from 36m in OPAC246.

The Henry-Border prospect covers a 3 kilometre strike length geochemical anomaly along a major structure at the

contact between metasedimentary and mafic volcanic rocks of the Peak Hill Schist. Previous drilling in the 1990’s

intersected gold mineralisation including 6m @ 3.5g/t Au from 20m in HBRC15. Diamond drilling in 1995 at the

Henry-Border prospect by North Mining returned anomalous results of 1m @ 1.18 g/t Au, 1m @ 1.04g/t Au and

1m @ 1.45 g/t Au and recommended further drill testing of the prospect.

A review of previous drilling results also indicates base metal anomalism associated with mafic schists in the

Henry-Border prospect area. Results include 7m @ 0.2% Cu from 22m and 7m @ 0.15% Cu from 47m in OPR194

and 4m @ 0.25 Cu from 19m in OPR195. Further interpretation and follow-up exploration is being planned.

A limited aircore drilling program conducted by CSA Global on behalf of the previous owner, Grosvenor, in

December 2011 and February 2012 tested structural contact positions for gold mineralisation within the Peak Hill

Schist to the west of the Hermes deposit and south of the Peak Hill gold deposits. Assay results from the drilling

program are expected within six weeks.

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Figure 4: Hermes Gold Deposit – Results from RC drilling (applying 0.40g/t cut-off and 2m internal dilution).

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Murchison Projects

Assessment of the Company’s Murchison tenements continued with planning of targeted RC drilling at Jeffery

Well, and evaluation of the Wydgee, Ninden Hill, Gidgee South and Pollele projects.

Jindalee Resources Limited (“Jindalee”) is a 20% JV partner in a number of Alchemy’s Murchison Projects.

Jindalee’s interest is noted where relevant.

Aircore drilling programs at Jeffery Well (Alchemy 80%, Jindalee 20%) in 2010 and 2011 delineated a coherent

1,500 x 500 metre supergene gold anomaly localised in a structural corridor at the regional lithological contact

between basalts in the west, and felsic-intermediate volcaniclastics in the east. The gold corridor may represent

an extension of the Sarus gold prospect previously drilled by MPI Ltd in the 1990s. The drilling results to date are

encouraging and likely represent the supergene expression of a large alteration cell that is also anomalous in the

classic Archean gold pathfinder elements, including As, Sb, Bi, Te, Mo and W.

An initial broad-spaced aircore drilling program at Gidgee South (Alchemy 100%) in 2011 outlined a zone of weak

gold anomalism extending over 4km in length, with weakly anomalous pathfinder element geochemistry on

bottom-of-hole samples confirming the gold assay results.

The Jeffery Well and Gidgee South prospect areas were initially targeted based on regional fault flexures

identified from Alchemy’s 3D Murchison GOCAD model, which may represent the northern continuation of the

highly-mineralised Big Bell – Meekatharra shear zone, which hosts the Big Bell gold deposit (3.9 Moz). The follow-

up exploration results from Jeffery Well highlight the potential in the Murchison District for not only large lode

gold systems but also for narrow high grade gold systems, similar to the gold mineralisation identified north of

Meekatharra at Andy Well by Doray Minerals Limited.

Planning of in-fill aircore and targeted RC drilling that will test the most prospective parts of the gold anomalous

zone at Jeffery Well for internal structures hosting high-grade vein mineralisation is in progress.

Re-assessment of the Wydgee and Ninden Hill projects (Alchemy 80%; Jindalee 20%) in 2011 highlighted the base

metal prospectivity of these project areas. Mapping by the Geological Survey of Western Australia, in

combination with discovery of base metal mineralisation by Silver Swan Group at Austin, Reed Resources at

Chunderloo and Silver Lake Resources at Eelya, indicates that the northern Murchison district hosts volcanic

sequences with significant base metal potential.

Field mapping, rock chip sampling and surface geochemistry programs over the Wydgee and Ninden Hill projects

delineated several areas of gold and/or base metal anomalism that will be the subject of further exploration and

drill testing in 2012.

A field assessment and surface geochemistry program was completed over the southern part of the Pollele

Project (E51/1326: Alchemy 100%; E51/1042, E51/1225 & E51/1226: Alchemy 80%, Jindalee 20%) in 2011. In an

area north of Burnakura Bore on E51/1326, an interpreted north-south corridor of quartz-carbonate alteration

associated with a folded sequence of mafic rocks and corresponding with a de-magnetised zone in magnetic

images, represents a favourable target for further exploration. Results of surface geochemistry program over the

south-eastern part of E51/1326 have delineated several small zones of gold anomalism that will be followed up

during the year.

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Corporate

On 24 February 2012 Alchemy completed a pro-rata non-renounceable offer to eligible shareholders of 1 ordinary

fully paid share for every 3 shares held at an issue price of $0.13 per share to raise approximately $4.2 million

(before costs).

The capital raising satisfied a condition of the acquisition and settlement of the Grosvenor tenements and set the

deemed issue price of $0.13 for the share issue to Grosvenor’s nominee, Bluecrest Mercantile Master Fund

Limited (“Bluecrest”) to complete the asset sale agreement. Following the issue of these consideration shares on

1 March 2012, Bluecrest became Alchemy’s largest shareholder with 17.16% of its issued capital, and Ms Sofia

Bianchi, Portfolio Manager at Bluecrest, was invited to join the Board of the Company

At 31 March 2012, the Company had approximately $5.2 million in cash to fund a highly focussed exploration

program for DeGrussa-style deposits on its expanded Bryah Basin landholding.

The WA Industrial Relations Commission has dismissed an application filed by Mr Robert Brierley, the Company’s

former Managing Director, for the payment of a total of $163,500, being 6 months’ salary plus superannuation he

claims should be paid to him in lieu of notice of termination following his resignation from the Company in

November 2011.

Please direct enquiries to: Mr Oscar Aamodt – Chairman

Dr Kevin Cassidy – Chief Executive Officer

Telephone: +61 8 9481 4400

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The information in this report that relates to Exploration Results is based on information compiled by Dr Kevin Cassidy, who is a Fellow of the Australian Institute of Geoscientists and is a fulltime employee of Alchemy Resources Limited. Dr Cassidy has sufficient experience that is relevant to the style of mineralisation, 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 Resource and Ore Reserves’. Dr Cassidy consents to the inclusion in this 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 Mineral Resources at the Hermes Gold Deposit and Wilgeena Gold Deposit is based on information compiled by Mr Simon Coxhell of Coxsrocks Pty Ltd, who is a Member of the Australian Institute of Geoscientists and a Member of the Australasian Institute of Mining and Metallurgy and is a consultant to Alchemy Resources Limited. Mr Coxhell has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that 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 Resource and Ore Reserves’. Mr Coxhell consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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Table 1: Hermes Project – Significant intervals from RC Drilling, >0.40g/t gold

Prospect Hole ID MGA

East (m) MGA

North (m) Hole

Depth (m) From (m)

To (m)

Interval (m)

Gold (g/t)

Comment

Winchester TRC341 692214 7169758 180 88 89 1 0.73

97 99 2 1.11

114 117 3 2.53

122 125 3 2.02

144 145 1 1.44

153 156 3 1.28

Hawkeye TRC342 691695 7169376 250 167 168 1 0.79

171 172 1 0.44

182 186 4 2.46

205 232 27 1.46 incl. 1m @ 10.15 g/t (228m)

236 241 5 0.54

Hawkeye TRC343 691693 7169353 241 138 141 3 4.82

168 193 25 1.57 incl 1m @ 11.95 g/t (169m)

Hawkeye TRC344 691679 7169342 220 168 169 1 6.01

191 209 18 1.17

213 214 1 1.44

Trapper TRC348 691728 7169000 239 53 55 2 2.81

110 111 1 0.71

115 116 1 1.42

122 126 4 3.14

135 139 4 0.87

145 146 1 0.45

150 151 1 0.40

188 203 15 1.60

216 220 4 0.63

Trapper TRC349 691630 7168870 179 110 114 4 0.32

125 127 2 1.16

130 135 5 0.56

144 161 17 0.86

Trapper TRC350 691608 7168868 185 133 135 2 2.21

149 161 12 1.54

Trapper TRC351 691372 7168768 269 107 125 18 9.79 incl. 5m @ 32.1 g/t (110m)

West

165 166 1 0.40

173 174 1 13.4

200 208 8 1.03

211 217 6 1.30

229 233 4 0.33

236 238 2 1.39

Trapper TRC352 691355 7168727 200 38 39 1 0.47

West

44 48 4 0.27

64 66 2 1.27

123 129 6 0.83

145 146 1 0.40

154 164 10 3.05

189 191 2 3.04

Calculation of Assay Results:

Quoted drill intersections are based on a lower cut-off of 0.40g/t gold with a maximum of 2 metres of internal dilution (i.e., samples with

less than 0.40g/t gold). Assay results were obtained from geochemical analysis of 1 metre split samples. Sampling was undertaken

following logging of geological boundaries within the drill hole. All samples were analysed at ALS Global Laboratories in Perth. Samples are

prepared using single stage pulverization of the entire sample. Gold assays are obtained using either 30g fire assay or screen fire assay

technique and atomic absorption spectrometry analysis finish. Full analytical quality assurance - quality control is achieved using a suite of

certified standards, laboratory standards, field duplicates, laboratory duplicates, repeats, blanks and grind size analysis.

The location of drill holes is determined using a handheld GPS achieving less than 10m accuracy and using the MGA datum (Zone 50). All

drill holes at were drilled at -60 degrees to 135 degrees MGA azimuth.

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