31 December 2011

Market Cap (31-Dec-2011)

$12.27M (share price: 7.3c)

Cash (31-Dec-2011)

$3.84M

Directors

Damien O’Reilly (Chairman)

Glyn Povey (Managing Director)

Gary Castledine

Neville Bassett

Robert Hyndes

Brian Williams

Company Secretary

Neville Bassett

Address

Level 1, 3 Richardson Street

P.O. Box 1325

West Perth WA 6872

Australia

Contact

P: +61 (0) 8 6188 7800

F: +61 (0) 8 9481 8772

contact@vectorresources.com.au

www.vectorresources.com.au

Share Registry

Link Market Services Ltd

Ground Floor, 178 St Georges Tce

Perth WA 6000

Australia

P: +61 1300 554 474

F: +61 2 9287 0303

www.linkmarketservices.com.au

The Directors of Vector Resources Limited (“Vector” or the

“Company” ASX: VEC) are pleased to provide the quarterly report

for the period ended 31 December 2011.

At the date of this Quarterly Report, the Company has

168,145,833 fully paid ordinary shares and 126,886,666 listed

options (exercise price of $0.20, expire on 30 June 2012) on issue.

10,000,000 listed options (exercise price of $0.20, expire on 20

December 2014) on issue. 4,000,000 listed options (exercise price

of $0.40, expire on 20 December 2015) on issue.

Key highlights

• Two Consecutive Resource Upgrades at Gwendolyn East

totalling 78,300 ounces Au;

• Resource Upgrade at the Lightning deposit at Mt Dimer

totalling 8,725 ounces Au;

• Global Resource now 205,865 ounces Au;

• Continued exploration RC drill programs at Mt Dimer and

Gwendolyn East;

• Interpretation of aeromagnetic surveys over Muriels

Extension complete;

• Interpretation work on aeromagnetic surveys over Mt

Palmer and Clampton near completion;

• Completed infill Geochemical Soil Auger drilling on

tenements M77/ 957, M77/958 and M77/965;

• RAB drill program submitted to DMP to explore the new

Geochemical Soil anomalies at Mt Dimer;

• RAB drill program submitted to DMP to explore

aeromagnetic targets at Muriels Extension; and

• Completed majority of Phase 2 RC drill program at

Gwendolyn East.

During the second quarter of the financial year the Company has

continued the aggressive exploration programs at Mt Dimer and

Gwendolyn East.

The three major project hubs located near Southern Cross,

Leonora and Earaheedy have all progressed during the quarter.

Further details of the advancements of these projects are

described below.

QUARTERLY REPORT

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Southern Cross

Mt Dimer (M77/427, M77/428, M77/957, M77/958, M77/965, E77/1992, P77/4081)

Mt Dimer is the Company’s flagship gold project with an existing JORC compliant resource:

# Notes on Global Resource

Global resource is a combination of historical and new resource up-grades, refer to Golden Iron Resources prospectus “7 May 2010”.

During the quarter the technical team continued its consolidation of all historical data for the Mt

Dimer projects. This included the new data from RC drilling and information from the geochemical

auger program. 2 Program of Works (PoW) were submitted in October and December 2011 for 483

holes totalling 24,150 metres of RAB drilling to explore the new green field targets identified from

the Geochemical drilling, approval is currently pending.

Site activities included the tightening of the original auger pattern on tenements M77/957, M77/958

and M77/965 to 50 metres by 100 metres grid from the original 80 metres by 200 metres. This is

intended to give a higher resolution of the anomalies identified during the first pass program.

RC drilling during the second quarter continued with a total of 30 holes drilled for 3,070 metres

targeting areas of Golden Slipper deeps, Golden Slipper North/South, Lightning, IP4, Frodo and LO5

locations. The results of the drilling in and around the Lightning deposit resulted in a resource

upgrade that was released on the 21st December 2011. This resource upgrade shows the

mineralisation is open along strike and at depth. Further drilling will be designed to test the extent of

this mineralisation. The current Phase 1 drill program will continue working through the hole

prioritisation during the second half of this financial year.

Lightning Plan View

JORC Category

g/t Total g/t Total g/t Total g/t Total

Au Oz Au Au Oz Au Au Oz Au Au Oz Au

Mt Dimer # 88,800 4.6 10,400 429,570 4.96 68,555 518,370 4.7 78,955

Total 88,800 4.6 10,400 429,570 5.0 68,555 518,370 4.7 78,955

Measured Resource Indicated Resources Inferred Resource Total Resource

Project Tonnes Tonnes Tonnes Tonnes

Lightning Location

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Lightning’s two Geostatistical Domains Resulting from Geological Modelling Divided by the TOFR (orange surface)

During the quarter environmental monitoring of historical points of interest were conducted to

compare with previous monitoring. A weed spraying program was conducted targeting various

weeds such as nyguri, bathurst burr, skeleton weed and Ruby dock identified on access roads around

pits and surrounding areas including the pits Bund walls. Other clean-up activities of old historical

poly and scrap material were also completed during the quarter.

Gwendolyn (E77/1580 & P77/3976)

There has been substantial work carried out on tenement (P77/3976) this quarter after the

completion of the majority of the Phase 2 RC drill program. On the 17th October and the 19th

December 2011 the company released consecutive resource upgrades at the Gwendolyn East

project. The historic inferred resource of 33,300 ounces of Au increased to 79,700 ounces Au in

October 2011 and then to 106,000 ounces Au in December 2011. In addition to the JORC resource an

Exploration Target* within and surrounding the resource is estimated between 592,000 - 1,100,000

tonnes and 46,000 - 103,000 ounces Au, mineralisation remains open at depth and along strike.

* Notes on Exploration Targets In accordance with Clause 18 of the JORC Code, it is important to note that the ‘Exploration Target’ referred to above remains subject to further exploration and evaluation to bring the ‘unclassified material’ to a JORC Compliant resource. The current interpretation is conceptual in nature and remains preliminary and is based on exploration, evaluation and resource definition work undertaken to)date.

JORC Category

g/t Total g/t Total g/t Total g/t Total

Au Oz Au Au Oz Au Au Oz Au Au Oz Au

Gwendolyn 1,214,000 2.71 106,000 1,214,000 2.71 106,000

Gwendolyn Tails 238,000 0.7 5,600 238,000 0.7 5,600

Total 238,000 0.7 5,600 1,214,000 2.7 106,000 1,452,000 2.4 111,600

Measured Resource Indicated Resources Inferred Resource Total Resource

Project Tonnes Tonnes Tonnes Tonnes

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Plan View of Gwendolyn Phase 1 & 2 Drill Program and New Resource

A Phase 3 drill program of diamond and RC drilling was submitted to the Western Australian

Department of Mine and Petroleum (DMP) in December 2011 for an additional 174 holes totalling

18,490 metres. This program is intended to target extensions to the mineralisation along strike and

increase the drill density in the exploration target material to make JORC categories.

Gwendolyn Oxidised Final Domain Model for the Gwendolyn Resource, Looking ENE

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Clampton (E77/1591)

The raw data from the aeromagnetic survey carried out in the previous quarter was handed to

FlagStaff who commenced the interpretation work. This interpretation was due for completion in

October 2011 and has been delayed due to the consultants work load and is still pending.

The interpretation from the aeromagnetic survey in combination with the desktop study of historical

data will be used to identify potential targets for further exploration activities. This analysis work is

will now be completed in the third quarter of the financial year.

Great Bingin (M77/1255)

Great Bingin previously (P77/3386) has now had the mining license granted as M77/1255. The

company submitted a RC drill program of 52 holes totalling 5,680 metres in the previous quarter,

approval by the DMP was received on the 3rd November 2011. This program is designed to test the

extent of the mineralisation along strike and at depth from the current historic resource envelop.

Great Bingin Historic Open Pit

Athenia (P77/3434 & P77/3637)

During the quarter, the exploration team conducted several field trips to the tenements conducting

reviews of surface geology and conformation survey work of historical drilling and excavations.

On 5th October, the Company received approval for a PoW consisting of 29 holes for 2,120 metres

from the DMP. The RC drill program is designed to test the extent of the mineralisation at depth and

along strike of the two major mineralisation loads identified to-date.

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Mt Palmer (E77/1318, E77/1386 & P77/3678)

The raw data provided from the aeromagnetic survey is currently with the geophysicist consultants

for interpretation. Once completed the team will use this data to identify potential exploration

targets and determine if extensional structures to adjoining tenements that had substantial

historical mining exist.

Leonora

Muriels Extension (M37/661 & P37/758087587)

The aeromagnetic survey with 25 metre line spacing that was flown in the previous quarter was

interpreted by the geophysicist consultants. The exploration team submitted a PoW for 172 RAB

holes totalling 8,600 meters to the DMP in November 2011, approval is currently pending for this

program.

Earaheedy Basin

Earaheedy Joint Venture (50% Vector Resources / 50% Cazaly Resources)

Cazaly Resources Limited (ASX:CAZ) and Vector Resources Limited (ASX:VEC) (collectively the

Earaheedy Joint Venture “EJV”) signed a farm-in agreement with ANGLO AMERICAN (“ANGLO”), the

global diversified mining house, covering a large part of EJV’s Earaheedy Iron project in the Wiluna

region of Western Australia. EJV’s Earaheedy project covers an area in excess of 1,700 km2 including

a substantial strike extent of the iron ore prospective Frere Formation.

The Farm-In Agreement relates to an area of approximately 890 km2 and allows for ANGLO to

complete an initial “proof of concept” program with a minimum of 7,500m of RC or diamond drilling

to be completed as due diligence within 18 months. Following this, ANGLO may earn an initial 51%

interest in the project by payment of an initial $1M in cash to the EJV and the expenditure of $20M

within 4 years. ANGLO may then earn a total 75% interest in the project by the completion of a

Bankable Feasibility Study (BFS) and payment of a further $5M to the EJV.

In addition, following delivery of a positive BFS, a success payment of $45M would become payable

by ANGLO to the EJV. The EJV may then elect to contribute to project expenditure or dilute to a

royalty of 1.25% FOB. Normal industry standard terms also apply.

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ANGLO has conducted some initial geological mapping at the project which identified what are

interpreted to be structurally folded and repeated units of iron-enriched formations. No assay

results have been received but visual estimates of >50%-55% Fe within enriched units may have a

cumulative strike length of >14km. An aeromagnetic survey for Mt Cecil Rhodes and Sydney Heads

area was also completed. Desktop flora and fauna surveys were also delivered with no significant

environmental issues evident.

Figure: Photographs of iron enriched units.

(A) 75m wide enriched iron horizon.

(B) Hematite rich unit.

(C&D) Detail of Hematite rich units.

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Earaheedy District Aeromagnetic Survey

The EJV retains sole rights to the western portion of EJV’s Earaheedy project area which is also

deemed to be highly prospective for manganese mineralisation. Field programmes are currently

being planned.

An Aboriginal Heritage Site Clearance Survey was completed at the Blue Cliffs and Blue Nugget

manganese prospects within Exploration Licence 69/2063. The survey has now allowed for access to

drill pad locations, required access tracks and to a remote camp location. No archaeological or

ethnographic sites of significance were identified. Exploratory Reverse Circulation (RC) drilling is

planned to commence at the Earaheedy Project early in the June quarter to test mapped manganese

exposures at the Blue Cliffs and Blue Nugget prospects.

Appendix 5B

Attached is a copy of the Company’s Mining Exploration and Entity Quarterly Report in accordance

with Listing Rule 5.3.

ENDS # Notes on Global Resource

Global resource is a combination of historical and new resource up-grades, refer to Golden Iron Resources prospectus “7 May 2010”.

* Notes on Exploration Targets

In accordance with Clause 18 of the JORC Code, it is important to note that the ‘Target Resource’ referred to above remains subject to

further exploration and evaluation to bring the ‘unclassified material’ to a JORC Compliant resource. The current interpretation is

conceptual in nature and remains preliminary and is based on exploration, evaluation and resource definition work undertaken to date.

Competent Person’s Statement

Southern Cross and Leonora Projects

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The information in this report that relates to Exploration Results, for the Southern Cross and Leonora projects is based on information

compiled by Mr Peter Thomas who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Thomas is employed by

Thomas Bradley and Associates Pty Ltd.

Mr Thomas 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 Thomas 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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Appendix 5B

Mining exploration entity quarterly report

+ See chapter 19 for defined terms.

31/12/2011 Appendix 5B Page 10

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

Vector Resources Ltd

ABN Quarter ended (“current quarter”)

99 107 541 453 31 December 2011

Consolidated statement of cash flows Cash flows related to operating activities

Current quarter $A’000

Year to date ( 6 months)

$A’000

1.1 Receipts from product sales and related debtors

- -

1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration

(1,693) - -

(419)

(2.718) - -

(755) 1.3 Dividends received - - 1.4 Interest and other items of a similar nature

received 57 122

1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other (Due Diligence on Golden Iron

Resources Ltd Takeover) - -

Net Operating Cash Flows

(2,055) (3,351)

Cash flows related to investing activities

1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets

- -

(8)

- -

(60) 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 Other (provide details if material) - -

Net investing cash flows (8) (60)

1.13 Total operating and investing cash flows (carried forward)

(2,063) (3,411)

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Appendix 5B

Mining exploration entity quarterly report

+ See chapter 19 for defined terms.

31/12/2011 Appendix 5B Page 11

1.13 Total operating and investing cash flows (brought forward)

(2,063) (3,411)

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. 1,995 1,995 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 - -

Net financing cash flows 1,995 1,995

Net increase (decrease) in cash held

(68) (1,416)

1.20 Cash at beginning of quarter/year to date 3,917 5,265 1.21 Exchange rate adjustments to item 1.20 - -

1.22 Cash at end of quarter 3,849 3,849

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

126

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

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Appendix 5B

Mining exploration entity quarterly report

+ See chapter 19 for defined terms.

31/12/2011 Appendix 5B Page 12

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

Amount available $A’000

Amount used $A’000

3.1 Loan facilities

- -

3.2 Credit standby arrangements

- -

Estimated cash outflows for next quarter

$A’000

4.1 Exploration and evaluation

2,633

4.2 Development

-

4.3 Production

-

4.4 Administration

210

Total

2,843

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.

Current quarter $A’000

Previous quarter $A’000

5.1 Cash on hand and at bank 2,489 330

5.2 Deposits at call 1,360 3,587

5.3 Bank overdraft - -

5.4 Other (provide details) - -

Total: cash at end of quarter (item 1.22) 3,849 3,917

Changes in interests in mining tenements

Tenement reference

Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements acquired or increased

M77/1263 Conversion from P77/3976 0% 100% For

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Appendix 5B

Mining exploration entity quarterly report

+ See chapter 19 for defined terms.

31/12/2011 Appendix 5B Page 13

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 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

- - - -

7.3 +Ordinary securities

168,145,833 168,145,833 - -

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

12,500,000

12,500,000

$0.08

$0.08

7.5 +Convertible debt securities (description)

- - - -

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

- - - -

7.7 Options (description and conversion factor)

126, 886,666

5,000,000 5,000,000 4,000,000

126, 886,666

- - -

Exercise price $0.20 $0.20 $0.20 $0.40

Expiry date 30/06/2012 20/12/2014 20/12/2014 20/12/2015

7.8 Issued during quarter 5,000,000 5,000,000 4,000,000

- - -

$0.20 $0.20 $0.40

20/12/2014 20/12/2014 20/12/2015

7.9 Exercised during quarter

- - - -

7.10 Expired during quarter

- - - -

7.11 Debentures (totals only)

- -

7.12 Unsecured notes (totals only)

- -

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Appendix 5B

Mining exploration entity quarterly report

+ See chapter 19 for defined terms.

31/12/2011 Appendix 5B Page 14

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 5).

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

Sign here: ............................................................ Date: 31/1/2012

(Director/Company secretary)

Print name: Neville Bassett

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 6: Exploration for and Evaluation of Mineral

Resources and AASB 107: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Financial

Reporting 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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