Market Update

Gold Project growing,

Divests non-core asset

Key Points:

• Horse Well Project landholdings expanded;

Increased by 105 km2 to 950 km2

New Exploration Licence application by Alloy

Option to earn 80% of adjacent Exploration Licence with Phosphate Australia Limited

Covers over 20 strike kilometres of prospective greenstone belt in north-west of Project area.

• Barrytown Project Farm-out;

Term Sheet signed with Pacific Mineral Resources Limited (PMRL)

PMRL to earn 80% by completing Pre-Feasibility Study within 2 years.

Summary

Alloy Resources Limited (ASX:AYR, the "Company") is pleased to provide an update on recent activities related to the Company’s projects.

The priority focus of the Company is the Horse Well gold project in Western Australia and the Company is pleased to have been able to expand its landholdings in this prospective greenstone belt.

Managing Director Andy Viner said “Over the last year we have gained a much better understanding of the gold mineralisation in this area and we are quite excited about the potential in the north-west of the project around the Crack of Dawn prospect. This area was defined by Eagle Mining in the 1990’s and has never been followed up despite widespread drill hole anomalism and a bottom of hole hit of 11m @ 3.45 g/t Au”.

“It is our intention to explore this area in the future and we have now secured any potential upside in the region through these additions to our landholdings. Aeromagnetic data shows extensions to the greenstone belt under sand cover within these new tenement areas, and local complexity that may indicate gold mineralising structures are present” he said.

ABN 20 109 361 195 ASX Release 19 September 2012 Alloy Resources Ltd Suite 6, 7 The Esplanade Mount Pleasant WA 6153 Tel: +61 8 9316 9100 Fax: +61 8 9315 5475 Email: info@alloyres.com Website: www.alloyres.com Directors Non-Exec Chairman: Peter Harold Managing Director: Andy Viner Non-Exec Director/Co Sec: Kevin Hart Issued Capital Shares: 186,044,870 Unlisted Options: 7,500,000 Performance Rights: 3,500,000 ASX Symbol: AYR F

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Figure 1. Location of new tenement additions at Horse Well project.

POZ Option in green and Alloy ELA in blue.

Horse Well Project tenement additions

Phosphate Australia Limited Option;

• The Company has entered into an Option Agreement with Phosphate Australia Limited (POZ) to acquire an 80% interest in Exploration Licence 69/2820 located adjoining the north-western part of the Horse Well Project (see Figure 1). An option fee of $25,000 is payable on commencement.

• The Option Exercise Period is for 2 years during which the Company must meet Minimum Annual Expenditure commitments.

• The Company may exercise the Option at any time during the Exercise Period by payment of $25,000 cash and the issue of $25,000 in shares in the Company. The Company may also withdraw at any time during the Exercise Period, contingent on meeting the Minimum Expenditure pro-rata at that time.

• The parties will form a Joint Venture upon Exercise of the Option, and POZ will be free-carried to completion of a bankable feasibility study. Thereafter POZ may contribute or dilute and should the POZ interest fall to 5% then its interest will revert to a 1.5% net smelter royalty.

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The Company has also secured new tenure through an application for Exploration Licence 69/3069, adjoining its existing controlled tenure and the POZ tenement.

The Horse Well project area has been significantly enhanced through these new tenement additions in the opinion of the Company.

The greenstone belt that hosts 100,000 ounces of gold Mineral Resources (see attached Mineral Resource Table) within the Company’s tenements some 15 kilometres to the south, extends north-westerly through the new tenement additions (see Figure 2).

Figure 2. Horse Well expanded project area with geology

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The Crack of Dawn prospect located in the north-west of the project area, adjacent to the new tenements, has been prioritised as an area of strong interest for future exploration. This prospect has a number of air-core drill anomalies with intersections including;

11 metres @ 3.45 g/t Au from 44 – 55 metres (bottom of hole) 5 metres @ 0.23 g/t Au from 48 – 53 metres (bottom of hole) 16 metres @ 0.16 g/t Au from 40 – 56 metres (bottom of hole) 4 metres @ 0.24 g/t Au from 48 – 52 metres (bottom of hole)

These results come from vertical holes on generally broad spacing, suggesting infill and expanded drilling has the potential to discover new gold mineralised areas. The Company is currently compiling and interpreting data from the area and will endeavour to schedule heritage surveys and infill drilling before the end of the year.

Barrytown Project Divestment

Pacific Mineral Resources Limited Farm-out Term Sheet;

• The Company (Alloy) has signed a binding Term Sheet with Pacific Mineral Resources Limited (PMRL) to conditionally farm-out an 80% interest in EP 51803 located in New Zealand. PMRL is an unlisted public company.

• The parties intend to enter into a formal binding Farm-in Agreement within 3 months, subject to obtaining consent from the relevant regulatory authorities satisfactory to the Boards of each party.

• PMRL has assumed an obligation to meet the Minimum Commitment work program for the current year of the licence.

• The Farm-in Period is for 2 years during which the Company must deliver to Alloy a positive pre-feasibility study (PFS).

• PMRL will pay Alloy $75,000 cash or $200,000 shares in a publicly listed entity 12 months after commencement of the Farm-in Agreement.

• Upon completion of the PFS, PMRL will pay Alloy $75,000 cash or $200,000 shares in a publicly listed entity.

• The parties will form a Joint Venture upon completion of the PFS, and Alloy can either elect to contribute or reduce to a 10% interest and be free carried to completion of a bankable feasibility study. Thereafter Alloy may contribute or dilute and should the Alloy interest fall to 5% then its interest will revert to a 1.5% net smelter royalty.

The Company is pleased to have found a party with an intention to fully investigate the potential to create a mining development on this property.

For further information contact:

Andy Viner

Managing Director

Phone: +61 8 9316 9100

www.alloyres.com

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Horse Well Gold Resources Table

PROJECT PROSPECT JORC

CATEGORY TONNES GRADE (g/t Au) OUNCES Au

Horse Well Palomino indicated 656,000 2.52 53,150 Inferred 105,000 3.71 12,525 Bronco indicated 41,400 1.59 2,117 Filly indicated 161,300 1.56 8,091 Filly SW indicated 90,400 7.85 22,817 Total 1,054,100 2.91 98,700

Exploration Results

The information in this report which relates to Exploration Results is based on information compiled by Andrew Viner, a Director of Alloy Resources Limited and who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Viner 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 Viner consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Mineral Resources

The resources in this release are based on work carried out by Dr. S. Carras FAusIMM of Carras Mining Pty Ltd. Dr. Carras has 30 years of 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 “Australian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves” and consents to the inclusion in this report of the information in the form and context in which it appears

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