Quarterly Activities Report and Appendix 5B

29 January 2015 Red Emperor Resources NL QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDING 31 DECEMBER 2014 AND APPENDIX 5B The Board of Red Emperor Resources NL ("Red Emperor" or the "Company") ispleased to provide the following commentary and Appendix 5B for the periodending 31 December 2014. Puntland As reported in our last quarterly update, during the previous reporting period,the Federal Government hardened its position with regards to the requirement ofcontracts to flow through the Federal Ministry of Energy, as evidenced by thestatement of the Federal Minister at the Somalia Oil & Gas Conference in lateOctober 2014. As a result, and subsequent to the quarter end, the JV iscurrently in the process of closing down its office in Bosaso and releasing itsentire staff. In addition, all contracts will be terminated, with exception ofthe production sharing agreements ("PSAs"), but including those for the leaseof the villas and the lay-down yard, with all remaining inventory in Puntlandbeing disposed of or sold. The aim of these actions is to reduce the JV's cost exposure until there isclarity and contractual certainty around the PSAs and the legal regime thatcurrently exists in country. The JV has proposed that the Puntland governmentoffers it a two-year extension to both PSAs, free of any consideration, so thatwe may work together to properly establish the environment required for furtherinvestment in this exploration program. Red Emperor is obviously disappointed that the above-mentioned actions have hadto be taken, however we are very supportive of the operator, Horn Petroleum,and feel that the JV was left with no other alternative. The Company remainshopeful that an extension can be granted and the JV can once again operate inPuntland with the aim of unlocking the enormous oil & gas potential that isbelieved to exist. Georgia During the quarter, Strait Oil and Gas ("Strait") stepped up on-groundactivities in preparation for the scheduled drilling program, which was to seethe JV drill a well on Block VIb by March 2015. The drilling of this well is tobe funded by Range Resources Limited ("Range") as part of the SubscriptionAgreement signed between the two companies in 2011. Range has advised RedEmperor that it is negotiating a financing deal with a third party that isdesigned to reduce its financial exposure to the well. Red Emperor cannotprovide any guarantees that such negotiations will result in a successfultransaction and is cognizant of Range's current financial position. Red Emperoris awaiting further correspondence from Range. We will update the market assoon as possible in relation to the outcome of these discussions. Corporate Red Emperor continues to review new opportunities as it has done throughout theyear, in accordance with its previously outlined strategic philosophy. TheCompany is in advanced discussions in respect of at least one transaction andhopes to be able to provide more detail to the market in the coming weeks. Meanwhile, Red Emperor continues to hold 1m shares in Highfield Resources,which last traded at $0.755, valuing the holding at $755,000, a $275,000unrealised profit on its original investment of $480,000. Appendix 5B Summary - Consolidated statement of cash flows Cash flows related to operating Current quarter Year to date (6 months)activities $A'000 $A'000 1.1 Receipts from product sales and - - related debtors 1.2 Payments for (a) exploration & (114) (215) evaluation - - (b) development - - (c) production (259) (522) (d) administration 1.3 Dividends received - - 1.4 Interest and other items of a 98 183 similar nature received 1.5 Interest and other costs of finance - - paid 1.6 Income taxes paid - - 1.7 Other (provide details if material) - - Net Operating Cash Flows (275) (554) Cash flows related to investing activities 1.8 Payment for purchases of: (a) - - prospects - (182) (b) equity investments - (59) (c) investment in associate 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 - (241) 1.13 Total operating and investing cash (275) (795) flows (carried forward) 1.13 Total operating and investing cash (275) (795) flows (brought forward) Cash flows related to financing activities 1.14 Proceeds from issues of shares, - - options, etc. 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 (provide details if material) - - Net financing cash flows - - Net increase (decrease) in cash (275) (795) held 1.20 Cash at beginning of quarter/year 9,801 10,321 to date 1.21 Exchange rate adjustments to item - - 1.20 1.22 Cash at end of quarter 9,526 9,526 For further information please visit www.redemperorresources.com or contact: Red EmperorGreg Bandy +61 8 9212 0102Grant Thornton UK LLP Philip Secrett/Jen Clarke/Jamie Barklem +44 20 7383 5100Fox-Davies Capital LimitedJonathan Evans +44 20 3463 5010