Annual exploration report Brocks Creek Group year ending 26 June 2003 MLN 1139, MLN 176, MCN 4689-4697, MCN 4701-4703, MCN 4863-4871, MCN 4895-4899

Abstract

The Brocks Creek assets comprising the group tenements and mill were purchased from AngloGold (Brocks Creek) by Buffalo Creek Mines Pty Ltd (a subsidiary of Hill 50 Gold NL) in November 2001. In April 2002 an agreement was finalised (Burnside Joint Venture) between Northern Gold NL and Buffalo Creek Mines P/L in equal shares. The agreement merged certain assets within a 30km radius of the Brocks Creek mill under the management of Burnside Operations Pty Ltd. Ownership of Hill 50 Limited passed to Harmony Gold (Australia) Pty Ltd in mid 2002. The principal objective of the Burnside joint venture is to bring any economic gold resources in the merged tenement holdings into production and treat them at the Brocks Creek Mill. Most of the annual expenditure in 2001-2002 comprised refurbishing the camp, mill and mine site facilities and conducting pre-mine engineering and resource studies on the Zapopan deposit. Environmental control monitoring and basic refurbishment in preparation for the new operation was carried out during the wet season. In September 2002 site preparations commenced at the small but high grade Zapopan gold resource in MLN 1139. By May 2003 a decline access had been established from the bottom of the Zapopan open pit to the 980 level and a 12,000t stockpile of development ore was at grass. Underground diamond drilling into the Zapopan deposit was carried out from the new development. This comprised 1,540.6m in 37 holes. This data was used to create an accurate structural and grade block model of the deposit. Apart from some void probe holes within the Zapopan pit, no surface exploratory drilling was carried out in the Brocks Creek Group tenements during the report period, though intensive RC programs had been under way since July 2002 testing resources in adjacent joint venture tenements. This activity is the subject of separate reports. Computer modelling and optimisation of the Rising Tide gold deposit near the northern boundary of MLN 1139 was carried out along with a resource report. All work reported was within MLN 1139. No exploration work was done in the remainder of the Brocks Creek tenement group. In mid 2003 the Burnside JV partners resolved to suspend exploration activity in the region pending a turn around of adverse economic factors. Time was also required to complete a full economic analysis of the Zapopan deposit