ACN 129 954 365

ASX: KBL, KBLGA Level 3, 2 Elizabeth Plaza, Nth Sydney NSW 2060. PO Box 98, Nth Sydney NSW 2059

3 SEPTEMBER 2012

P a g e | 1

ASX RELEASE

Confirmation of New Copper/Gold Lode at

Mineral Hill Mine, NSW

• Underground drilling has confirmed a new high grade copper/gold lode

immediately below the current Parkers Hill workings.

• Development has commenced to provide access to the lode.

• Latest drill intersections include

4.45 metres at 8.0% Cu and 3g/t Au in hole KUPH009 and

3.75 metres at 7.3% Cu and 2g/t Au in hole KUPH007

• The lode will bring forward the commencement of high grade copper/gold

production at Mineral Hill Mine to late October 2012

KBL Mining Limited (ASX: KBL and KBLGA) has received further drilling results

that confirm a new copper-gold lode directly below the current development

level of its underground mining operations at Mineral Hill Mine in New South

Wales. The Parkers Hill ore body at Mineral Hill Mine, which is currently being

mined, was previously thought to be restricted at depth by the shallowly west

east dipping 1225 thrust (Figure 1). The latest results form a part of an

underground diamond drilling program aimed at extending mining reserves

below the lowest development level at 1190mRL (120 metres from surface).

The new results from holes KUPH007 (3.75m at 7.3% Cu and 2g/t Au) and

KUPH009 (4.45m at 8% Cu and 3g/t Au), in addition to previously announced

KUPH005 (16.1m at 3.8% copper and 9g/t gold), have established that the new

copper-gold lode continues more than 30 metres below the current

development level at 1190mRL and remains open along strike to the northeast

and southwest This is a separate gold-rich style of copper mineralisation

located below the 1225 thrust compared to the copper-silver rich (plus lead

and zinc) Parkers Hill Resources. Intersections in Hole KUPH004 are largely

above the 1225 thrust. The on-going drilling program is aimed at depth

“The high copper and gold

grades of these intersections,

directly below current mining

operations, add substantial

value to Mineral Hill.

Accessing this new lode is

possible using current

equipment and personnel at

minimal additional cost and

quickly. These results also

highlight the high copper and

gold prospectivity of Mineral

Hill at depth.”

Trangie Johnston

Chief Executive Officer

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ACN 129 954 365

ASX: KBL, KBLGA Level 3, 2 Elizabeth Plaza, Nth Sydney NSW 2060. PO Box 98, Nth Sydney NSW 2059

3 SEPTEMBER 2012

P a g e | 2

extensions and strike extensions to the southwest. Continuity of mineralisation to the south of the recent

drill intersections is considered highly likely with grades of +10% copper and +20 g/t gold already

identified from sampling in the southernmost development drive on 1190mRL. An initial Resource will be

estimated for the copper-gold lodes after completion of the drilling program.

Details of the significant intersections from these holes and KUPH005 are as follows

Hole Interval (m) Cu % Pb % Zn % Ag g/t Au g/t From (m)

KUPH004 13 2.4 0.9 1.4 8 0.4 36

includes 1.55 3.9 1.3 4.1 16 0.1 38

and 3.2 4.2 1.2 0.8 10 0.3 45.8

KUPH005* 7.45 1.4 0.3 0.3 5 0.3 32.35

16.1 3.8 0.8 2.0 9 9 48

includes 2.3 8.7 1.4 0.6 22 41.5 48

and 6 4.8 1.1 3.8 10 5.9 56

KUPH007 3.75 7.3 0.5 1.7 16 2 59.6

0.75 1.2 0 0 4 3.1 72.95

KUPH009 4.45 8 2 2.3 20 3 44.55

includes 2.35 15.2 0.5 1.6 24 4.5 44.55

5.6 1.6 0.2 1.2 7 1.3 53.4

Table 1: Drilling results from underground diamond drilling directly below current mining operations at Mineral Hill

*Previously announced on 15 August 2012

Underground drilling is continuing, and assay results are pending for a further diamond drill hole

(KUPH006) above KUPH007. Similar-style high grade mineralisation has been logged in this hole by KBL

geologists (Figure 2).

Recent decline development of 35 metres has been achieved to access lower Parkers Hill resources. Based

on these new intersections, a re-design of this development has been completed to access the new

copper-gold lodes at 1170mRL and 1155mRL to bring forward planned copper/gold production. A total of

94 metres of additional development is designed to intersect the new lode and will be completed by end

October 2012 (Figures 3 and 4). The high grade copper-gold lodes will contribute development ore to

mine production from late-October and stope ore during the March 2013 quarter. The introduction of

elevated gold into the Parkers Hill production schedule will add significant revenue in the 2013 financial

year. For

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ACN 129 954 365

ASX: KBL, KBLGA Level 3, 2 Elizabeth Plaza, Nth Sydney NSW 2060. PO Box 98, Nth Sydney NSW 2059

3 SEPTEMBER 2012

P a g e | 3

Figure 1: Cross section showing the location of significant mineralised intervals in holes KUPH005 and KUPH009.

Figure 2: Plan of

recently completed diamond holes intersecting the new interpreted Cu-Au lode below the 1190 development level.

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ACN 129 954 365

ASX: KBL, KBLGA Level 3, 2 Elizabeth Plaza, Nth Sydney NSW 2060. PO Box 98, Nth Sydney NSW 2059

3 SEPTEMBER 2012

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Figure 3: Plan of new decline access to high grade copper-gold lodes

Figure 4: Oblique diagram showing existing and planned decline development to access high grade copper-gold lodes

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ACN 129 954 365

ASX: KBL, KBLGA Level 3, 2 Elizabeth Plaza, Nth Sydney NSW 2060. PO Box 98, Nth Sydney NSW 2059

3 SEPTEMBER 2012

P a g e | 5

About KBL Mining

KBL Mining is an Australian resource company listed on the ASX (KBL and KBLGA) with a focus on precious and base

metals. KBL’s main assets include the Mineral Hill copper-gold-silver-lead-zinc project near Condobolin in New

South Wales and Sorby Hills lead-silver-zinc deposit in Western Australia. The Company has been operating the

refurbished processing plant at Mineral Hill since October 2011 to produce copper concentrates. Sorby Hills (KBL

holds 75% with Henan Yuguang Gold & Lead Co. Ltd (HYG&L) holding 25%) is one of the world’s largest near surface

undeveloped lead deposits, close to port infrastructure and a short distance from Asian markets. Environmental

approvals are currently being sought for development of the Sorby Hills deposit.

More information can be found on KBL’s website at www.kblmining.com.au.

Competent Persons Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information

compiled by Anthony Johnston, MSc (Hons), who is a Member of the Australasian Institute of Mining and Metallurgy

and is a full-time employee of the Company. Anthony Johnston 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 Johnston consents to the inclusion in the announcement of the matters

based on his information in the form and context that the information appears

For further information, please contact:

Anthony (Trangie) Johnston

Chief Executive Officer

KBL Mining Limited

Ph +61 2 9927 2000

Will Beaurepaire

Senior Advisor, Investment & Strategy

KBL Mining Limited

Ph +61 2 9927 2010

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