Wide zones of copper mineralisation remain open along strike and at depth

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1 Quarterly Activities Report For the Period Ended December HIGHLIGHTS Merceditas Project, Chile Option Agreement Merceditas Option agreement renegotiated with Option payments deferred for 12 months Maiden JORC Code Compliant Inferred Resource Maiden JORC Code compliant Inferred Resource Estimate for the Paula and Lucy Prospects of 6.4 million tonnes at 0.65% copper for 41,300 tonnes of contained copper 90% of resource occurs from surface to 80m depth within interpreted oxide zones amenable to heap leaching Overall Inferred Mineral Resources estimate of 26.4 million tonnes at 0.44% copper, at a cut-off grade of 0.3% copper Significant scope to increase both tonnes and grade with infill and extension drilling as well as testing of previously unexplored areas at both the Paula and Lucy Prospects Genesis Minerals Limited ABN: Level 3, 10 Outram St West Perth, WA, Australia, 6005 PO BOX 437, West Perth WA, Australia, 6872 T: F: info@genesisminerals.com.au Registered Office 23 Altona St West Perth WA 6005 Issued Capital million shares 9.75 million options ASX Code: GMD Board Members Michael Haynes Chairman Michael Fowler Managing Director/CEO Graeme Smith Non Executive Director Company Secretary Corporate Wide zones of copper mineralisation remain open along strike and at depth Numerous new opportunities in South America were evaluated during the quarter. Genesis will continue to evaluate opportunities and where appropriate, aggressively pursue them. Management is carefully managing its working capital. General and administrative expenses have been reduced to a minimum to conserve cash. Chile Office Alcántara 200, 6th Floor Las Condes Santiago, Chile GMD December 2008 Quarterly Activities Report 1

2 MERCEDITAS PROJECT Option Agreement Genesis is pleased to report the Vendor of the Merceditas Project has agreed to defer future staged payments under the current Option agreement by 12 months. No further payments are due until January Resource Estimate The Company is pleased to report its maiden Mineral Resource estimate for the Merceditas Project in northern Chile. An Inferred Resource has been estimated for the Paula and Lucy Prospects of 0.65% copper for 41,300 tonnes of contained copper. The Lucy Prospect contains 0.16g/t gold for 19,700 ounces of gold. The resource remains open in a number of areas and considerable potential exists to substantially increase the resource defined at the project through further exploration. Genesis Minerals Limited To date Genesis has completed 67 RC holes at the Merceditas Project in two phases, for 5,320 metres, between May and October This drilling has comprised mostly wide spaced drilling at the Principal Zone SE and the Pupy Zone at the Paula Prospect and limited drilling at the Lucy Prospect. The average hole depth was 80 metres. The mineralised zones defined to date remain open along strike and at depth. Details of the Resource Statement and Parameters used are detailed in Appendix 1. Merceditas Planned Exploration 2009 Proposed exploration for 2009 will include: 1. Extensional oxide drilling at Lucy to the east and north of current drilling particularly holes MERC % Cu from 28 metres and 0.75% Cu from 60 metres to EOH) and MERC % Cu from 44 metres to EOH) which returned significant copper mineralisation over a zone 100 metres wide. 2. Continued extensional drill testing of the Primary Zone and Pupy Zone at Paula including deep testing of the Pupy mineralisation. Wide zones of copper mineralisation at Pupy were returned in 2008 from surface in adjacent holes MERC % Cu from 2 metres) and MERC % Cu from 0 metres). 3. Initial metallurgical leach testwork. 4. Further trenching and exploration of the areas away from known mineralization including drill testing of the 1,000m long Estaca trench anomaly. GMD December 2008 Quarterly Activities Report 2

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4 WESTERN AUSTRALIAN PROJECTS MUNDONG WELL PROJECT No work has been completed on the two exploration licences which have recently been granted at the Mundong Well Project which is situated 200km south east of Exmouth, in the Ashburton Region of Western Australia. The Project is located in the northern half of the Gascoyne Complex and is prospective for hydrothermal uranium mineralisation associated with a north west trending structural corridor and coincident uranium channel radiometric anomaly. The tenements cover approximately 8km of strike of the prospective zone. Potential also exists for structurally controlled lead-copper mineralisation. CORPORATE Exploration expenditure during the quarter totalled $0.5 million. As at the 31 December 2008, Genesis had A$0.7 million on hand. Michael Fowler Managing Director Further Information Contact - Michael Fowler or mfowler@genesisminerals.com.au GMD December 2008 Quarterly Activities Report 4

5 Background of Project Genesis Minerals Limited The Merceditas Project is located in northern Chile s Iron-Oxide-Copper-Gold ("IOCG") belt which is one of the most prospective IOCG provinces in the world. It is located approximately 1,000km north of Santiago, the capital of Chile, in the Atacama Desert and is easily accessible by road in an area that is serviced by very good infrastructure. The information in this report that relates to Mineral Resources is based on information compiled by Mr Paul Payne, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Payne is employed by Runge Limited. Mr Payne has sufficient experience that 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 Mineral Resources. Mr Payne 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 announcement was compiled by Michael Fowler, Genesis Minerals Limited Managing Director, who is a Member of The Australasian Institute of Mining and Metallurgy. Michael Fowler has sufficient experience that 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 Mineral Resources. Michael Fowler consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears. GMD December 2008 Quarterly Activities Report 5

6 Appendix 1 Resource Statement and Parameters An Inferred Mineral Resource estimate for the copper-gold (Cu-Au) deposits of the Merceditas Project area was completed by Runge Limited (Runge). The Merceditas Project is located in the Atacama Desert region of Northern Chile in an area of mild relief with altitudes ranging from 1,400m to 1,600m. The project area forms part of Chile s IOCG belt which is host to a number of large IOCG deposits that are currently being mined. The table below shows the Inferred Mineral Resource Estimate at various cut off grades. Merceditas December 2008 Inferred Mineral Resource Estimate 0.2% Cu Cutoff Paula ,300 Lucy , ,800 Total , % Cu Cutoff Paula ,800 Lucy , ,300 Total , % Cu Cutoff Paula ,600 Lucy , ,700 Total , % Cu Cutoff Paula ,800 Lucy , ,700 Total ,300 The resource estimate was completed using the following parameters: The Lucy estimate covers a 1,100m lateral extent from 387,500E to 388,600E and the vertical extent of the resource is 240m, from surface (1,430m) to 1,185m. The Paula estimate covers a 1,650m lateral extent from 386,850E to 386,450E and the maximum vertical extent is 260m from surface (varies from 1,630m to 1,500m) to 1,360m. Drill holes used in the resource estimate included 93 RC holes for a total of 4,507m within the resource wireframes. Holes in the resource were drilled at section spacings roughly 100m east-west and on average 40m north-south. RC holes were sampled at 2 metre intervals. Two 12.5% split samples were taken off a 3 tier rig mounted splitter, while the bulk reject was collected in plastic retention bags to enable further test work to be conducted. Sample preparation and assaying was carried out by ALS Laboratories in La Serena, Chile. Assaying of Cu was carried out using a 4 acid digest and AAS analysis. Assaying of Au was carried out using a 30g charge fire assay and AAS analysis. A blank sample was submitted for each drill hole where material was sourced from beach sand at Chanaral. Field duplicates were produced every 20 th sample. A series of graphs were produced by Genesis showing the accuracy and repeatability of the standards and GMD December 2008 Quarterly Activities Report 6

7 blanks. A scatter plot of duplicate data was also produced by Genesis. These have been reviewed by Runge and no significant issues were found. All Genesis holes were surveyed after completion of drilling by a licensed surveyor Nelson Guita based in Copiapo, using a theodolite. A total of 18 Genesis holes were down hole surveyed. These were carried out by Comprobe Ltda using a gyroscope with readings taken every 10m. The remaining holes did not remain open after drilling was completed. A detailed topographic survey of the Paula Prospect was carried out by Nelson Guita during the recent drilling program using a theodolite. Collar positions have been used to create a topographic surface for the Lucy Prospect. Wireframes were constructed using cross sectional interpretations based on mineralised envelopes constructed at a nominal 0.10% Cu cutoff. Samples within the wireframes were composited to even 2.0m intervals. Statistical analysis indicated no high grade cuts were required. The block dimensions used in both models were 80m NS by 80m EW by 10m vertical with sub-cells of 40m by 40m by 5m for Lucy and 20m by 20m by 2.5m for Paula. OK grade interpolation used an oriented ellipsoid search for Cu and Au. Au was not estimated in the Paula Prospect due to the lack of samples. Two passes were used to estimate the model with over 98% of the models being estimated in the first pass. A bulk density value of 2.4t/m 3 supplied by Genesis was assigned to the entire resource. Drilling has defined consistent zones of mineralisation at the prospects indicating reasonable continuity of geology. However the drilling is too widely spaced to confirm continuity of the Cu grade. This, coupled with a lack of bulk density data has resulted in the estimate being classified as Inferred Mineral Resource. The overall magnitude and grade of the mineralisation suggests that the project has reasonable prospects for eventual economic extraction. The information in this report that relates to Mineral Resources is based on information compiled by Mr Paul Payne, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Payne is employed by Runge Limited. Mr Payne has sufficient experience that 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 Mineral Resources. Mr Payne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. GMD December 2008 Quarterly Activities Report 7