December 2012 Quarterly Report

Aceh gold-copper project, Indonesia

Prosperity continues to focus on its Aceh project (figure 1) in Indonesia. Limited exploration activities were done during the quarter as we entered the wet season and capped by limited funding.

Prosperity Resources Limited

100 Parry St

PERTH WA 6000

ABN 60 103 280 235

PO Box 7516

Cloisters Square

PERTH WA 6850

Tel: +618 9322 7575

Fax: +618 9322 9485

Website : www.prosperity.net.au

Email :info@prosperity.net.au

Share Registry Enquiries: Computershare Investor Services

45 St Georges Terrace

PERTH WA 6000

Tel: +618 9323 2000

Fax: +618 9323 2033

Capital Structure: ASX Listed Shares: 408.1M ASX Unlisted Options: 8.35M

ASX Code: PSP - ordinary shares

Directors: Mo Munshi Chairman/Managing Director

John Arbuckle

Non-Executive Director

Sebastian Hempel

Non-Executive Director

Mufti Habriansyah

Non-Executive Director

Figure 1: Prosperity's land package in Aceh


December 2012 Quarterly Report

Corporate

The Company held its Annual General Meeting ("AGM") on 30 November 2012 with all resolutions passed by show of hands and by proxy. Details of the AGM results can be found at www.prosperity.net.au

No exploration fieldwork was carried out at Tennant Creek and Mt Gibson project during the quarter.

For further information please contact:

Mo Munshi Chairman/Managing Director Prosperity Resources Limited

+86 139 1017 5192

or visit www.prosperity.net.au

Competent Person Statement: Information in this announcement that relates to Exploration Results is based on information compiled by Dr. Neil F. Rutherford. Dr. Rutherford is a Fellow of The Australian Institute of Geoscientists and is a full time employee of Rutherford Mineral Resource Consultants, mineral industry consultants. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 JORC Code. Dr. Neil Rutherford has consented to the inclusion in this report of the matters based on this information in the form and context in which it appears.


Appendix 5B
Mining exploration entity quarterly report

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

Rule 5.3

Name of entity

Prosperity Resources Limited

ABN Quarter ended ("current quarter")


60 103 280 235 31 December 2012

Consolidated statement of cash flows

Cash flows related to operating activities

1.1 Receipts from product sales and related debtors

1.2 Payments for (a) exploration & evaluation

(b) development

(c) production

(d) administration

1.3 Dividends received

1.4 Interest and other items of a 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

+ See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 3

Appendix 5B
Mining exploration entity quarterly report

1.13 Total operating and investing cash flows

(brought forward)

(85)

(684)

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

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 held

1.20 Cash at beginning of quarter/year to date

1.21 Exchange rate adjustments to item 1.20

1.22 Cash at end of quarter

(85)

138

(684)

737

Net increase (decrease) in cash held

1.20 Cash at beginning of quarter/year to date

1.21 Exchange rate adjustments to item 1.20

1.22 Cash at end of quarter

53

53

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

1.2

3

Aggregate amount of payments to the parties included in item 1.2 3

1.2

4

Aggregate amount of loans to the parties included in item 1.10

1.2

5

Explanation necessary for an understanding of the transactions

Director salary

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

NA

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

NA

+ See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 4

Appendix 5B
Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities

3.2 Credit standby arrangements

Estimated cash outflows for next quarter

4.1 Exploration and evaluation

4.2 Development

4.3 Production

4.4 Administration

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.

Changes in interests in mining tenements

Tenement

reference

Nature of interest

(note (2))

Interest at

beginning of quarter

Interest at

end of quarter

+ See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 5

Appendix 5B
Mining exploration entity quarterly report

6.1 Interests in mining tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements acquired or increased

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.

7.5 +Convertible debt securities (description)

7.6 Changes during quarter

(a) Increases through issues (b) Decreases through securities matured, converted

+ See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 6

7.12 Unsecured notes (totals only)

Appendix 5B

Mining exploration entity quarterly report

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: 25 January 2013 (Company secretary)
Print name: G Taylor

+ See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 7

Notes

Appendix 5B

Mining exploration entity quarterly report
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.
== == == == ==

+ See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 8

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