REPORT FOR THE QUARTER ENDED 30 JUNE 2013 Key Points:

? Mining Right granted for key Moabsvelden project.

? Eskom off-take negotiations underway.

? Corporate initiative significantly advanced with successful completion of due diligence by a third party.

? Equator Principles review completed.

Mining Right granted for Moabsvelden thermal coal project

In May, the Company received written advice from the South African Department of Mineral Resources (DMR) that the Minister for Minerals and Energy has granted a mining right in respect of the Moabsvelden thermal coal project.
Subsequent to this significant development, the Company has received and accepted a proposal from Lombard Insurance Company Limited (Lombard) whereby Lombard has agreed to provide the DMR with a guarantee for ZAR 19 959 823 (approximately A$2.22 million) in respect of the environmental bond which is required to be posted in order for the mining right to be registered and come into effect. The Moabsvelden project company, Neosho Trading 86 (Pty) Ltd (Neosho), will be required to deposit
20% of the bond amount with Lombard and progressively cash back the balance over a period of approximately six years.
Pursuant to the granting of the Mining Right, 25,000,000 Class B Performance Shares were converted into ordinary shares on a 1 for 1 basis and all remaining voluntary escrow restrictions were removed.
During the quarter, processing of other regulatory permits, including an Integrated Water Usage License, continued with a number of meetings having been held with the relevant officials.

Eskom negotiations

Following the successful completion of ignition testwork undertaken by Eskom (the domestic power utility) on Moabsvelden bulk samples, Eskom and Neosho have commenced negotiations in regard to a proposed coal supply agreement governing the supply of coal by Neosho to Eskom.
Eskom has a requirement for different coal qualities to be delivered to a number of power stations and the negotiations are currently focused on what would be the optimal mix of products and destinations having regard to the differing coal yields and transport logistics.

Page 1 of 3

Corporate Initiative

On 20 June 2013, the Company advised the market that it is in discussions with a third party regarding a proposal which, if it were to proceed, could result in a corporate transaction involving the Company (Proposal).
Whilst the Proposal continues to be indicative, non-binding, incomplete and conditional, the third party has successfully completed their due diligence and has now presented draft documentation for the Company to review. The Company expects to make an announcement shortly as to whether or not the Proposal will proceed.
The Company advises that it has received a number of enquiries from other parties looking to invest in Xceed. Certain of these parties have undertaken due diligence. In the event that the Proposal does not proceed, the Company may look to advance discussions with these parties.

Equator Principles Compliance

During the quarter, Environmental Resources Management (ERM), a recognized expert organisation in the field of Equator Principles compliance, reviewed the work undertaken by the Company in respect of its environmental and social management plans and is now finalizing its report to Standard Bank. The Equator Principles is a financial industry benchmark for determining, assessing and managing social and environmental risk in project financing. A number of banks, exchanges and organizations worldwide have adopted the Equator Principles as requirements for funding.

Engineering Procurement and Construction (EPCM) and Mining Contract

Other than receiving quotes for the supply of EPCM services, no contractor supply agreements were entered into during the quarter.

Bankfontein and Roodepoort (XCD: 15% earning 70%)

No further work was undertaken on these projects during the quarter.

Cash position

As at 30 June 2013, the Company held cash of $1.86 million. In addition, an amount of $0.342 million is held in an escrow account maintained by the Company's lawyers. The execution of formal agreements governing Thebe's investment into Neosho triggered the payment of a success fee of $0.342 million into this escrow account.
During the quarter, the Company made a payment of $1.74 million to the vendors of the Moabsvelden thermal coal project in accordance with the terms of the original agreement whereby Xceed acquired its
74% stake in Neosho. This payment was triggered by the granting of a mining right for Moabsvelden.

Plans for September Quarter

During the September quarter, and subject to the outcome of the corporate initiatives mentioned above, the Company intends to:

? Secure additional regulatory approvals for the Moabsvelden Project;

? Select and Appoint the chosen EPCM and Mining Contractors;

? Commence drafting of loan documentation;

? Advance discussions with Eskom for coal off-take and power supply agreements; and

? Advance negotiations to acquire the surface rights to the Moabsvelden Project site.

Page 2 of 3

Far further information regarding the Company, please contact the Company an +61 8 9226 0329 or referto www.xceedresources.com.au

Far and an behalf of the Board of

Xceed Resources limited


lan Culbert

Managing Director

31July 2013

Page 3 of 3

distributed by