Annual exploration report, Brocks Creek Group, year ending 26 June 2004 MLN 1139, MLN 176, MCN 4689-4697, MCN 4701-4703, MCN 4863-4871 and 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 30 km radius of the Brocks Creek mill under the management of Burnside Operations Pty Ltd. Ownership of Hill 50 Limited and its equity in the Brocks Creek tenements passed to Harmony Gold (Australia) Pty Ltd in mid 2002. The principal objective of the Burnside joint venture was to bring any economic gold resources in the merged tenement holdings into production and treat them at the Brocks Creek Mill. In August 2004 the Brocks Creek Mill was sold to a third party and the joint venture purchased the mill and tenements at Union Reef from AngloGold Ashanti Australia Ltd. 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 for mining 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 1000 and 980 levels and a 10,000t stockpile of development ore from the levels was taken for treatment at the Union Reef mill. In the year ending June 26th 2003, 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 and a resource report. 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. Intensive RC and/or diamond core programs have been under way since July 2002 testing resources in adjacent joint venture tenements. This activity is the subject of separate reports. No surface exploratory drilling or sampling was carried out in the Brocks Creek Group tenements during the year ending June 26th 2004. Work was confined to a geological study of the Zapopan ore environment and engineering studies to optimise future mining methods. All work reported was within MLN 1139. No exploration work was done in the remainder of the Brocks Creek tenement group.