for the period ended 31 December 2012

Quarterly Activities Report

ASX Code: DRM Level 3, 41-43 Ord St West Perth Western Australia 6005 T: +61 9226 0600 F: +61 9226 0633 Email: info@dorayminerals.com.au www.dorayminerals.com.au Capital Structure (as at 31/12/12) 139.2M Shares (10.1M unlisted Options) Board of Directors Peter Alexander Non-Executive Chairman Allan Kelly Managing Director Heath Hellewell Technical Director Jay Stephenson Non-Executive Director Leigh Junk Non-Executive Director About Doray Minerals Doray Minerals Limited (ASX: DRM) listed on the ASX in February 2010 and was one of Australia's best performing IPOs in 2010 based on results from the high grade Andy Well gold project in Western Australia. Doray was named “Gold Explorer of the Year” in 2011 by the Gold Mining Journal. The company is currently focussed on advancing Andy Well through development into production. Doray has a strategic portfolio of exploration properties within WA and South Australia, and each presents Doray with multiple discovery opportunities.

MINING COMMENCES AT ANDY WELL

HIGHLIGHTS

Oversubscribed capital raising provides working capital for Andy Well Gold Project

Mining approval received for Andy Well Mining operations commenced (15 November)

Meekatharra accommodation village nears completion Judy Lode resource drilling commenced

Doray Minerals Ltd (DRM: ASX) is pleased to present shareholders with the Company’s Quarterly Activities Report for the period ending 31 December 2012. Doray made the transition from explorer to gold miner following the commencement of open pit mining operations at the Company’s 100% owned high-grade Andy Well Gold Project in the northern Murchison region of Western Australia. Managing Director Mr Allan Kelly said the commencement of mining was a significant milestone in the Company’s short history. “This commencement of mining operations signals the start of a new phase for Doray, Andy Well is also the first new gold mining operation in the Murchison Goldfields region in over 10 years,” Mr Kelly said. “Our open pit mining operations, site works for processing and other mine infrastructure are so far progressing on schedule and the accommodation village is nearing completion.” Mr Kelly said that mining of the stage 1 open pit would take approximately 4 months to complete, before moving underground, and that contractors would mobilise to site in January 2013 for commencement of the construction and eventual commissioning of the processing plant. “2012 has been an incredibly busy and successful year for Doray and the Company’s efforts now shift to commencement of gold production at Andy Well, currently scheduled for August 2013. “ “We are focused on achieving that goal on-time and within-budget and continuing to create value for our shareholders through the development of this very attractive project.” Mr Kelly said. Mr Kelly also advised that drilling has commenced within the Judy Zone, at Andy Well, with the intention of compiling a maiden JORC-compliant resource for the high grade Judy Lode in the first half of 2013.

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1. ANDY WELL GOLD PROJECT (Doray 100%) Activity during the Quarter focused on securing the various remaining project approvals culminating in the commencement of open pit mining operations at Andy Well.

1.1. Completion of Project Funding

During the Quarter, the Company completed the previously announced capital raising comprising:

a placement of approximately 41m new Shares @ 75c to raise approximately $30.8M; and a fully underwritten, pro-rata, 1:5 non-renounceable rights issue to raise an additional $12.2M.

Combined with the project finance facility, the capital raising provided the funds required for all forecast construction, operating, corporate and exploration costs prior to the first gold pour from Andy Well, currently scheduled for mid-2013. The raising also provided funds for the first payment for the purchase of the outstanding 20% of Andy Well as well as fundraising costs, bank fees and interest charges.

1.2. Project Approvals and Commencement of Open Pit Mining Operations

During the Quarter, the Company worked towards grant of the various permits required for the Andy Well Gold Project, resulting in receipt of approval of the Mining Proposal on 15th November, with site works commencing soon afterwards. Mining of the stage 1 open pit commenced on 22 November (Figure 1) and is scheduled to take approximately 4 months to complete. Based on the mining reserve quoted as part of the Andy Well BFS, the stage 1 open pit comprises 32,000t @ 14.9g/t Au for approximately 15,000 contained ounces1.

Figure 1. First truck load of material from Wilber Lode stage 1 open pit (15 November 2012).

                                                        1 see attached Appendix for more information 

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Following completion of a 5m pre-strip, the high grade open pit ore will be stockpiled in anticipation of the commissioning of the processing plant, scheduled for mid-2013, while waste material will be used for construction of various items of site infrastructure, including the tailings storage facility and ROM pad.

Once the stage 1 open pit reaches competent bedrock, at approximately 40m below surface, the portal will be established, followed by development of the decline and other underground infrastructure to access the high-grade underground mining reserve (600,000t @ 11.4g/t for 220,000 contained ounces). In contrast to a number of other current and proposed gold operations in the Murchison, the Andy Well Gold Project is based around a new greenfields gold discovery, the Wilber Lode gold deposit, rather than a previously mined deposit on a granted mining lease with existing mining and/or processing infrastructure. Andy Well is the first new gold mining operation in the Murchison goldfields region in over 10 years and Doray has progressed the project from discovery to commencement of mining in just over 2 ½ years. By the end of the Quarter, approximately 180,000bcm had been mined from the stage 1 open pit. The open pit mining schedule has been designed to selectively utilise waste material extracted from the open pit for construction of various items of site infrastructure including the ROM pad, access roads and pads to enable commencement of construction of the processing plant early in the upcoming Quarter.

1.3. Construction and Development Update The contractor responsible for supplying the processing plant, GR Engineering Services, has finalised all detailed design work and is scheduled to mobilize and establish site facilities ready to start work installing foundations for the plant in January. Orders for all long lead critical items were placed to suit a plant commissioning practical completion date of 31st July 2013. All electrical cabling and hardware between the various facilities around the site were designed and ordered to suit the site based diesel power station. The design to integrate IT communication systems between the site, Doray’s village in Meekatharra and Perth offices was completed and is being implemented. Other contracts awarded included fuel supply for the mine and a catering contractor which both commenced during the Quarter. Recuritment of additional team members to operate the underground mine was successful with further appointments of experienced senior professionals comprising a Chief Geologist, Underground Manager and two ERT/medical personnel.

1.4. Accommodation Village Construction of the Meekatharra accommodation village was completed during the Quarter (Figure 2). Prior to the Christmas break, the village was approximately 50% occupied and the permanent kitchen and mess were in operation (Figure 3).

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Figure 2. Meekatharra accommodation village, showing example of completed units and central courtyard.

Figure 3. Interior of new dining room.

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1.5. Andy Well Exploration

Judy Zone - Drilling commenced during the Quarter, with the aim of defining a maiden JORC-compliant resource for the high-grade Judy Lode in the first half of 2013. The programme of RC drilling will test for extensions to the dip and strike extents of the quartz lode, which is located parallel and to the east of the Wilber Lode deposit. The Judy Lode gold mineralisation appears similar in many respects to the high grade Wilber Lode, currently being mined, and therefore has the potential to add to the initial 3.7 year mine life, pending estimation of an initial resource and subsequent completion of positive mining and feasibility studies.

Figure 4. Long Section of Judy Lode showing existing drilling results.

2. REGIONAL EXPLORATION Doray Minerals has an exploration tenement portfolio covering a total of approximately 4,000km2 in both Western Australia and South Australia. In the northern Murchison Region of WA, Doray is actively exploring for gold mineralisation which has the potential to provide additional near-term development opportunities for its Andy Well Gold Operations. Concurrent with its programs in the northern Murchison, Doray continues to explore for large, stand-alone development opportunities, over its entire exploration portfolio, with programs in the southern Murchison Region and also South Australia focusing on the discovery of economic gold deposits. 2.1. North Murchison Region

Side Well (Doray 80%) Drilling of two diamond core holes was completed at the “Mulga Bill” prospect during the Quarter. The drilling was undertaken to confirm previous RC drilling results and gain a better understanding of the geological and structural controls on the extensive zone of alteration and mineralisation identified within the prospect. Side Well is a core project for Doray and exploration will continue there in 2013.

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Abbotts (Doray 80%) A review of historical data during the Quarter indicated that a proportion of the project area amenable to surface geochemical sampling had not been adequately covered by previous workers. A programme to cover these areas has been completed and has yielded three priority targets for infill sampling and ground checking.

2.2. South Murchison Region Magnet North / Lake Austin (Doray 80%) Systematic surface geochemical sampling was completed over all amenable parts of the project during the Quarter. Geological investigation of previously drilled prospects at “Lake” and “South Blackmans” was also completed. Potential targets for future drilling programs are currently being assessed. Webb’s Patch / Black Tank Well (Doray 100%) Systematic surface geochemical sampling was completed over all amenable parts of the project during the Quarter. Potential targets for future drilling programs are currently being assessed. Tuckunurra (Doray 100%) RC drilling was completed to test below the outcropping quartz veins at the Kingfield “prospect” during the Quarter, with narrow zones of gold mineralisation intercepted in a number of holes. The drilling programme effectively tested the target and the results have subsequently downgraded the likelihood that the prospect would meet Doray’s economic thresholds.

2.3. South Australia

Nuckulla Hill (Doray 100%) Orientation surface geochemical sampling to assess the potential for surface geochemistry as an effective tool in areas of poor calcrete regolith development along the Yarlbrinda Shear was completed. Results to date suggest targeted geochemical drilling may be the preferred method to provide an effective test of these areas. New Project Generation Doray applied for a number of new, 100% owned tenements in South Australia during the December Quarter.

3. CORPORATE

3.1. Financial Doray’s cash position at 31 December 2012 was approximately $38M. As previously indicated to the market, subsequent to the end of the Quarter, Doray has undertaken a gold hedging programme comprising the forward sale of 45,000 ounces at an average price of $1620AUD over the first 14 months of production. This comprises approximately 50% of total production from Andy Well over this period. Given the recent volatility in gold price, this hedging underpins repayment of the Company’s project finance facility during the first 14 months.

3.2. Business Development

The Company continues to review potential exploration and development opportunities, including in the Murchison region.

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4. TENEMENT HOLDINGS

Doray Interest Tenement

Tenements Granted - -

Tenements Acquired/Applied for

Doray 100% Doray 100% Doray 100% Doray 100% Doray 100%

E09/2032 P51/2807-P51/2824

EL2012/332 EL2012/333 EL2012/334

Tenements Relinquished - -

APPENDIX Table 1. Andy Well Mining Reserve, as at July 2012

Proven Probable Total

Tonnes Grade (g/t)

Ounces Tonnes Grade (g/t)

Ounces Tonnes Grade (g/t)

Ounces

Open Pit Stage 1

- - - 32,000 14.9 15,000 32,000 14.9 15,000

Open Pit Stage 2

- - - 28,000 15.3 13,000 28,000 15.3 13,000

Underground - - - 600,000 11.4 220,000 600,000 11.4 220,000

Open Pit – Low Grade

- - - 73,000 0.8 2,000 73,000 0.8 2,000

TOTAL ANDY WELL

RESERVE - - - 733,000 10.6 250,000 733,000 10.6 250,000

Note: Open Pit High Grade Reserves are based on a 1.4g/t Au lower cut-off grade, with Open Pit Low Grade Reserves based on a 0.3g/t Au lower cut-off grade. Rounding errors may occur. Competent Person Statement The information in this announcement that relates to Ore Reserves is based on information compiled by Peter Bamford. Peter Bamford is a full-time employee of Doray Minerals Ltd and is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Bamford has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activities which he is undertaking. This qualifies Mr Bamford as a “Competent Person” as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Bamford consents to the inclusion of information in this announcement in the form and context in which it appears. The information in this announcement that relates to Exploration Results is based on information compiled by Brad Drabsch. Mr Drabsch is a full-time employee of Doray Minerals Ltd and is a Member of the Australian Institute of Geoscientists. Mr Drabsch has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activities which the Company is undertaking. This qualifies Mr Drabsch as a “Competent Person” as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Drabsch consents to the inclusion of information in this announcement in the form and context in which it appears.

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Appendix 5B Mining exploration entity quarterly report

Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Name of entity

Doray Minerals Limited

ABN Quarter ended (“current quarter”)

48 138 978 631 31 December 2012

Consolidated statement of cash flows

Cash flows related to operating activities

Current quarter $A’000

Year to date 6 Months $A’000

1.1 Receipts from product sales and related debtors

- -

1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration

(746)

(12,072) -

(991) -

(1,702)

(18,112) -

(1,712) -

1.3 Dividends received 1.4 Interest and other items of a similar nature

received 58 84

1.5 Interest and other costs of finance paid - - 1.6 Income taxes paid - - 1.7 Other - -

Net Operating Cash Flows

(13,751)

(21,442)

Cash flows related to investing activities

1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets

- -

(671)

- -

(749) 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

(671)

(749) 1.13 Total operating and investing cash flows

(carried forward)

(14,422)

(22,191) For

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Appendix 5B Mining exploration entity quarterly report

Appendix 5B Page 2

1.13 Total operating and investing cash flows

(brought forward) (14,422) (22,191)

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. net of costs

40,942 41,005

1.15 Proceeds from sale of forfeited shares - - 1.16 Proceeds from borrowings - 14,145 1.17 Repayment of borrowings - - 1.18 Dividends paid - - 1.19 Other – Establishment fees - -

Net financing cash flows 40,942 55,150

Net increase (decrease) in cash held

26,520

32,959

1.20 Cash at beginning of quarter/year to date 11,617 5,178 1.21 Exchange rate adjustments to item 1.20 - -

1.22 Cash at end of quarter 38,137 38,137

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

Current quarter $A'000

1.23

Aggregate amount of payments to the parties included in item 1.2 408

1.24

Aggregate amount of loans to the parties included in item 1.10

-

1.25

Explanation necessary for an understanding of the transactions

Director Fees and Wages, Consulting fees

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facilities available Add notes as necessary for an understanding of the position.

Amount available $A’000

Amount used $A’000

3.1 Loan facilities

55,000 15,000

3.2 Credit standby arrangements

- -

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Appendix 5B Mining exploration entity quarterly report

Appendix 5B Page 3

Estimated cash outflows for next quarter $A’000 4.1 Exploration and evaluation

929

4.2 Development

27,335

4.3 Production -

4.4 Administration 925

Total 29,189

Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter $A’000

Previous quarter $A’000

5.1 Cash on hand and at bank 6,537 11,617

5.2 Deposits at call 31,600 -

5.3 Bank overdraft - -

5.4 Other (provide details) - -

Total: cash at end of quarter (item 1.22) 38,137 11,617

Changes in interests in mining tenements Tenement reference Nature of interest

(note (2)) Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements acquired or increased

P51/2807 - P51/2824 E09/2032 EL2012/332 EL2012/333 EL2012/334

APPLICATION APPLICATION APPLICATION APPLICATION APPLICATION

- - - - -

100% 100% 100% 100% 100%

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Appendix 5B Mining exploration entity quarterly report

Appendix 5B Page 4

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.

Total number Number quoted Issue price per security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.1 Preference +securities (description)

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

7.3 +Ordinary securities

139,200,101 139,200,101

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

200,000 57,373,576

200,000 57,573,576

20 cents 75 cents

20 cents 75 cents

7.5 +Convertible debt securities

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

7.7 Options (description and conversion factor)

2,682,488 1,250,000 150,000 250,000 150,000 2,000,000 175,000 50,000 100,000 390,000 150,000 150,000 100,000 2,500,000

Exercise price 20 cents 20 cents $1.14 $1.20 $2.06 $2.37 $1.65 $2.03 $2.08 $2.00 $1.93 $1.79 $1.27 $1.10

Expiry date 3 Sept 2014 4 Feb 2015 31 Aug 2014 31 Mar 2015 31 Aug 2015 31 Dec 2013 31 Oct 2015 12 Dec 2015 5 Dec 2015 1 Mar 2016 28 Feb 2016 10 Apr 2016 30 June 2016 20 Nov 2014

7.8 Issued during quarter

100,000 2,500,000

$1.27 $1.10

30 June 2016 20 Nov 2014

7.9 Exercised during quarter

200,000 20 cents

3 Sept 2014

7.10 Expired during quarter

1,650,000 1,650,000

$2.08 $2.56

31 Dec 2012 31 Dec 2012

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Appendix 5B Mining exploration entity quarterly report

Appendix 5B Page 5

7.11 Debentures (totals only)

7.12 Unsecured notes (totals only)

Compliance statement 1 This statement has been prepared under accounting policies which comply with

accounting standards as defined in the Corporations Act. 2 This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 24 January 2013

(Director/Company secretary) Print name: Iain Garrett

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