Warrego Reporting Group MLCs 22, 39-41, 71-76, 81-84, 98-108, 682 & 692 and MLCs 158-165, Annual report 26 March 2003 to 25 March 2004

Abstract

This report details exploration undertaken on the Warrego Leases (MLC 22, 39-41, 71-76, 81-84, 98-108, 682 & 692), Warrego Gravel Leases (MLC 158-165) and the Short Range Leases (MLC 300-303) of the Warrego Reporting Group for the period 26th March 2003 to 25th March 2004. The Short Range Leases MLC 300-303 were surrendered by Santexco on the 30th April 2003. Corporate strategy has required that the Warrego 'block' of ML's, that are not the subject of the sale agreement with Territory Iron Pty Ltd, be transferred from Santexco Pty Ltd to Giants Reef Exploration Pty Ltd. The Warrego Mine site, on which the Warrego Ore Treatment Plant (OTP) and other infrastructure stands, was recommissioned by Giants Reef as an ore processing facility in 2003 with the first ore processed on 17 October 2003. Ore processing, maintenance of the Warrego OTP, and environmental monitoring are the principal activities conducted on the site. Excavation of gravel continues on a 'as needs' basis on the Warrego Gravel Leases and it is envisaged that the life of the Warrego Gravel Leases will mirror that of the Warrego OTP. Details of operations and process at the Warrego site on the Warrego Reporting Leases are presented in the Mining Management Plan for the Warrego Project Area submitted in July 2004 to the Department of Business, Industry and Resource Management. Exploration work completed on the Warrego tenements during the reporting period includes the data compilation and review of the Warrego Hanging Wall mineralisation. A total of 9 RC drill holes for an advance of 1,046m were drilled in April/May 2004 to define and infill the prospect. The drilling effectively constrained the mineralisation between 8510mN and 8550mN and up and down dip. Further review and modelling of the mineralisation is continuing. Giants Reef has announced its copper diversification strategy. This initiative entails the review of existing gold and copper resources within the Company's holdings, including the Warrego hanging wall prospect, as well as future copper and gold exploration opportunities. Ten water monitoring bores (WMB22 - WMB31) for a total of 600m were drilled at Warrego to monitor groundwater in the vicinity of TSF1 and the bismuth oxychloride dam. Regular monitoring of the bores have been conducted over the year. No analyses were conducted on the drill cuttings.