Quarterly Activities and Cashflow Report

31 January 2010

Ferrum Crescent Limited

("Ferrum" or the "Company")

Quarterly Activities and Cashflow Report

For the period ended 31 December 2010

Ferrum Crescent Limited, the AIM and ASX quoted iron ore developer in northern South Africa, today announces Quarterly results for the three month period ending 31 December 2010.

HIGHLIGHTS:

·; Successful Admission to AIM market in London, and completion of a GBP10 million capital raising (approximately AUD16 million)

·; Completion of BEE acquisition

·; New development option decided for Moonlight Project

·; AUD600,000 sale of Australian exploration assets

·; Changes to the Board including the appointment of Ed Nealon as Executive Chairman, Fanie Botha as Operations Director; Kofi Morna, Ted Droste and Grant Button as Non-executive Directors, and the resignation of Matodzi Nesongozwi from the Board.

Capital raising and Admission to AIM

During the quarter ending 31 December 2010, Ferrum Crescent Limited was admitted to trading on the AIM market of the London Stock Exchange and completed a capital raising of 10 million pounds Sterling ("GBP") (equal to approximately AUD16 million) before expenses, via a placement of shares (the "Placing").

Pursuant to the Placing, by Ocean Equities Limited, the Company issued 100 million new shares at 10 pence per share ("Placing Price") to a broad base of institutional and other investors. Ambrian Partners Limited is acting for the Company as Nominated Adviser and Ocean Equities Limited as broker.

Use of Proceeds

As announced on 15 December 2010, the Company intends to use the net Placing proceeds, of approximately GBP8.8 million, to:

·; Bring the 470Mt of magnetite mineralisation expected at the Moonlight Deposit ("Moonlight") to full JORC compliant status;

·; Acquire an additional indirect interest in Moonlight;

·; Conduct further metallurgical testwork;

·; Complete environmental, social and labour studies;

·; Carry out a Definitive Feasibility Study on the development of a pellet plant at the Moonlight project to determine whether this is the most appropriate value adding process.

Turquoise Moon Iron Project

Development

During the course of 2010, the Company developed and defined the resource potential of the Turquoise Moon Iron Project ("the Project") (Ferrum interest approximately 81.5%) comprising the Moonlight Deposit ("Moonlight") and the De Loskop prospect. Moonlight has a JORC compliant resource of 74Mt in the Indicated Resource category and 225Mt in the Inferred Resource category at a grade of 30% iron. The De Loskop prospect has potential as a target* for magnetite mineralisation of 200Mt to 1,000Mt which is non-JORC compliant at a grade of 30-40 per cent Fe. Beneficiation testwork of Moonlight mineralisation indicates that a simple process of low intensity magnetic separation is suitable for optimum concentration. Separation at a grind size of 80% passing 150 µm achieved a mass recovery of 50% with final product grades of 69.7% Fe, 2.05% SiO2, and 0.40% Al2O3.

The Company believes that there are a number of possible routes for the commercialisation and development of the Moonlight magnetite deposit, which include the:

·; Manufacturing of iron ore pellets for supply via existing rail networks to domestic customers;

·; Supply of magnetite concentrate by rail for shipment to the international market;

·; Supply of merchant pig iron or granulated iron to domestic and international markets;

·; Export of directly reduced iron; and

·; Supply of semi-finished steel products to the domestic and regional market.

The Directors have considered these commercialisation options and the Company has retained AMEC Minproc SA ("AMEC") to undertake a definitive feasibility study on the development of a pellet plant at Thabazimbi for the production of iron ore pellets for the South African market, with magnetite concentrate delivered to the plant via a slurry pipe from Moonlight.

* The term "target" should not be misunderstood or misconstrued as an estimate of Mineral Resources and Reserves as defined by the JORC Code (2004), and therefore the terms have not been used in this context. It is uncertain if further exploration or feasibility study will result in the determination of a Mineral Resource or Mining Reserve

Strategy

As announced on 16 December 2010, the Company intends to develop its evaluation of the Project, in order to advance towards commercial production. This will involve completion of the first phase of the definitive feasibility study advised by AMEC. The planned programme is to be financed and implemented in discrete stages extending into 2012. It is intended that the deposit will be mined by conventional open pit methods followed by crushing, grinding and magnetic separation to produce a suitable concentrate. The mine pit optimisation work indicates an average strip ratio of 1:1 for the first 24 years of mine production. For transport requirements, the Project is serviced by South Africa's mature road and rail transport network. There is access to a sealed national highway within 10 km and rail within 170 km of the Project. The local rail authority, Transnet, has committed substantial investment over the near term to upgrade and maintain the rail network and rolling stock. In addition, the governments of Botswana and Mozambique signed a Memorandum of Understanding to develop a deep water port at Techobanine Point, south of Maputo, and connect it to Botswana Railway's network. This means that there could be an alternative rail access approximately 128 km to the east that would overcome any possible congestion problems of railways and ports in South Africa.

BEE Acquisition

On 23 December 2010, the Company announced that the sale agreement relating to the acquisition by the Company's new strategic BEE partner of the 26% of the Turquoise Moon Iron Project from the Company's former BEE partner had completed.

As described in the Company's AIM admission document dated 10 December 2010, a company, Mkhombi Investments (Pty) Ltd ("Mkhombi Investments"), which meets the requirements of applicable South African legislation in respect of historically disadvantaged persons (referred to in South Africa as being "BEE controlled"), entered into an agreement on 26 October 2010 with the then current holder of 26% of Turquoise Moon Trading 157 (Pty) Ltd ("TMT") to purchase that holder's right, title and interest in TMT for ZAR30 million (approximately AUD4.4 million). The South African Department of Mineral Resources expressed its support of the transaction.

Completion of the sale agreement occurred on 21 December 2010. The Company's wholly owned subsidiary, Nelesco 684 (Pty) Ltd, holds a 32.17% shareholding in Mkhombi Investments and advanced loan funds of ZAR22.5 million (approximately AUD3.3 million) to that company for the completion of the purchase of the TMT shares. The Company's effective interest in the Turquoise Moon Iron Project was thereby increased from 74% to approximately 81.5%.

Australian Exploration

On 29 October 2010, the Company announced it had agreed with Northern Uranium Limited ("Northern") (ASX:NTU) to dispose all of its Australian minerals exploration interests for a cash sum of AUD600,000. The offer from Northern was subject to both due diligence on the Company's tenement interests and the consent where relevant of joint venturers. This has now been concluded.

The sale of these Australian exploration interests has enabled the Company and its management to focus on developing its iron ore interests in Southern Africa and in particular to concentrate on progressing Turquoise Moon and finalising the mining right application process in respect of the Moonlight Deposit.

Board Changes

During the quarter, there were several changes to the composition of the Board of the Company. Messrs Kofi Morna, Ted Droste and Grant Button joined the Board as Non-executive Directors. Mr Ed Nealon assumed the role of Executive Chairman and Dr Fanie Botha was appointed as Operations Director.

Mr Morna and Mr Droste have extensive experience in the mining industry in South Africa and specifically in iron ore projects. Mr Button was previously an alternate director to Mr Scott Huntly, the Managing Director, but joined the Board as a Non-executive Director and has vast experience in the mining industry internationally, including in South Africa. In addition, Mr Nesongozwi stepped down as a Non-executive Director of the Company to pursue other interests.

1Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

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 4).

2 This statement does give a true and fair view of the matters disclosed.

Sign here: Date: 31 January 2011

Print name: Robert Hair

Company Secretary

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 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting 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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