Annual exploration report for EL 23431, Mt Bonnie West, year ending 19 December 2004

Abstract

The joint venture has been actively exploring the Burnside region since its formation in April 2002. Work to date has been focused on establishing open pit resources through RC drilling at Yam Creek-North Point, Mottrams, Chinese South Extension, and Woolwonga. Underground resources have been developed at the Zapopan Mine and Cosmopolitan Howley through diamond drilling and computer modelling. During the year the joint venture purchased the Union Reefs mill and tenement package, at the same time selling the Brocks Creek mill to Tanami Gold NL. It is anticipated that this acquisition will bring forward the development of known resources in the region and a higher level of exploration activity should ensue in parallel with this. Work on EL 23431 has been subordinate to activity on other JV tenements as the emphasis has been on establishing gold resources at established mineralised prospects. This emphasis has been consolidated by the purchase of the Union Reefs Mill in August 2004. It has escalated reviews of advanced stage resources with a view to early recommissioning of the plant. Expenditure during the year comprised structural interpretation and reporting. This amounted to $850.00 which falls short of the covenant for the year. It is anticipated that in the event of a start-up of the Union Reefs mill overall exploration activity by the JV will escalate further in 2005.