Quarterly Activities and Cashflow Report

31 October 2011

Ferrum Crescent Limited

("Ferrum" or the "Company" or, depending upon the context, the "Group") (AIM and ASX: FCR)

Quarterly Activities and Cashflow Report

For the period ended 30 September 2011

Ferrum Crescent Limited, the AIM and ASX quoted iron ore developer in northern South Africa, today announces its quarterly results for the three month period ending 30 September 2011.

HIGHLIGHTS:

Moonlight Iron Ore Project:

·; Definitive feasibility study ("DFS") progressed, including work on the metallurgical testwork programme, pipeline engineering and access studies, and identification of construction contractors and processing plant suppliers

·; Mining Right application process progressed, with grant of licence now anticipated in late 2011 or early 2012

·; Following a recent 12 hole drilling programme at Moonlight, work continues towards an updated resource model, which will be finalised in Q4 2011. A staged programme of some 10,000 metres of drilling is planned in 2012 on the Julietta farm, the adjacent farm to Moonlight, which is yet to be drill tested by Ferrum despite hosting known magnetite mineralisation

·; Certain DFS activities to be deferred pending consideration of all current infrastructure development programmes planned across southern Africa; the impact being full completion of the DFS will likely be delayed from Q4 2012 into 2013

Corporate:

·; Ferrum Crescent scheduled to list on the JSE in November 2011. Appointment of Robert Hair as Managing Director during the period

·; Cash as at 30 September 2011 is more than A$6m, with the Company funded for its currently planned work programmes

Moonlight Iron Ore Project

During the Quarter, Ferrum continued to progress the definitive feasibility study for the Moonlight Iron Ore Project. The work has focused on various aspects of the project including the pipeline route, plant location and pipeline access at Lephalale and beneficiation processes. The Company has also identified pipeline engineering and mining contractors and received expressions of interest from suppliers of processing plant equipment.

Ferrum also finalised preparation of a comprehensive metallurgical programme to include comminution and beneficiation studies. The initial phase of this work will use core samples from the current drilling programme and be directed at the development of a probable flow sheet for the upgrade of iron mineralisation to a product grade of suitable composition for the production of DRI pellets.

Positive discussions at a high level relating to rail, power, ports and water between the Company, Transnet and other South African infrastructure suppliers have been held. In addition, Ferrum is discussing such infrastructure needs with other resources companies within the Waterberg region (where the anticipated Moonlight Iron Ore Project is located). These companies, particularly those within the coal mining sector, have similar infrastructure requirements to Ferrum, and initial discussions have led to a potentially more optimal outcome than currently being contemplated in the ongoing DFS. To allow the Board time to consider current infrastructure development programmes planned across southern Africa, certain DFS activities will be deferred until we are satisfied all logistical options have been received. This means that the full completion of the DFS will be likely delayed from Q4 2012 into 2013.

In conjunction with the DFS, supporting plans and studies in order to progress the Group's mining right application were again advanced. Under the Mineral and Petroleum Resources Development Act (Act No. 28 of 2002) of South Africa and the National Environmental Management Act (Act 107 of 1998) of South Africa, the Company completed and submitted an environmental impact assessment (EIA) report within 180 days of the Mining Right application. The report was submitted in the Quarter, following the incorporation of comments arising from the public consultation process which was held in August. Whilst the process took longer than scheduled, the Company remains confident that the mining licence will be granted either late in 2011 or early in 2012.

With respect to the plan for 2012, the Board has agreed the following path forward, with action priorities in the following order:-

1. Firstly, a staged programme of some 10,000 metres of drilling will be carried out on the magnetite mineralisation at Julietta (the adjacent farm to Moonlight Farm, one of the three farms covered by the Moonlight mining right application) to carry out the detailed exploration that the project requires and thereby to add to the resource. Apart from estimating a JORC-compliant resource at Julietta, it is planned that samples from this drilling will be combined with material from Moonlight for the purposes of Davis Tube Recovery (DTR) testwork and subsequent mining studies, which will be carried out following such DTR testwork.

2. Secondly, furthering the good progress made this year on the infrastructure programme by developing the various plans to process and deliver the Company's iron ore to customers.

3. Lastly, to plan and develop the other studies, principally the metallurgical, mining and engineering studies, required for the DFS finalisation.

Julietta was drilled by South Africa's Iron and Steel Development Corporation ("Iscor") in the period 1993 - 1997, and though Iscor published the results of that drilling and its estimates of magnetite mineralisation at Julietta, Ferrum has not yet carried out any drilling there. The reason that it is considered high priority at this stage is that the Board considers that material from Julietta needs to be included in the next metallurgical test work.

Corporate

The Company's audited financial results and directors' report for the year ending 30 June 2011 were completed and released to the market on 08 September 2011.

The following table details the net profit / (loss) of the Company from continuing operations after income tax, together with the basic earnings / (loss) per share since the incorporation of the parent:

As previously announced, the Company has been planning a listing on the Johannesburg Stock Exchange ("JSE"). During the quarter, the preparations for such listing were well advanced. Quotation on the JSE is scheduled for November 2011. Listing of Ferrum on JSE is required in order to meet one of the conditions precedent to the finalisation of the share subscription agreement with Ferrum's BEE partner in the Moonlight Project. Under this and related agreements, the BEE partner's shareholding in Turquoise Moon, the company that holds the Moonlight Iron Project, will be swapped for shares at the holding company level, resulting in Ferrum having an effective 97% interest in Moonlight. (The remaining 3% will be held by a trust for the Ga-Seleka Community, the community which will be most impacted by the future mining activities at Moonlight).

On 13 July 2011, the Directors of Ferrum Crescent announced the appointment of Robert Hair as Managing Director of the Company, effective immediately. Following the end of the reporting period, Bob Van Der Laan resigned as Chief Financial Officer. His duties are being covered by Beverley Gardner in South Africa and an accounting firm in Australia. Beverley Gardner joined the Group on 1 July 2011 as Senior Accountant. Grant Button, a non-executive director of the Company and a qualified accountant and chairman of the audit committee, is providing oversight of the finance team whilst the Company adjusts to the changes in personnel in this function.

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

Consolidated statement of cash flows

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

Non-cash financing and investing activities

Financing facilities available

Add notes as necessary for an understanding of the position.

Estimated cash outflows for next quarter

Reconciliation of cash

Changes in interests in mining tenements

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.

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 October 2011

(Company secretary)

Print name: Andrew Nealon................... .............

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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