QUARTERLY REPORT

Quarterly Report

Three months ending
31 December, 2002

Cibaliung Project - Banten, Indonesia

• Regional exploration encouragement with high grade channel sample, 0.6m at 11.8 g/t Au, from trenching at north part of Rorah Kadal prospect.
  
  
• First scout drill hole at Rorah Kadal, AC-053, returned significant vein intercepts (>3 g/t Au cut-off) of 1m @ 5.4 g/t Au & 44 g/t Ag from 70.8m and 0.85m @ 9.8 g/t Au & 84 g/t Ag from 76.1m.
  
  
• Four extension drill holes completed for 1,518m at Cibitung and Cikoneng deposits. Drill hole AC-049 extended the strike of mineralization at the base of Cibitung shoot to the north with significant intercept of 5m @ 4.8 g/t Au & 93 g/t Ag from 330.8m. Drill hole AC-51 extended the strike of mineralization at the base of Cikoneng shoot to the south with significant intercept of 1.9m @ 17.7 g/t Au & 390 g/t Ag from 377.9m.
  
  
• Revision of Pre-Feasibility study commenced to account for updated geological interpretation based on extension drilling and revised cut-off grades due to 15% increase in gold price.

Mt Alexander Goldfields - Victoria, Australia

• Compilation and interpretation of data commenced for both project areas and field exploration work to start early in Q1- 2003.

Corporate

• Appointment of new Managing Director & CEO.

Expenditure

• Exploration expenditure during the quarter was A$498,965

	Figure 1: Location of Projects
Ian Price Managing Director & CEO 17 January 2003

EXPLORATION

CIBALIUNG PROJECT

Work at Cibaliung during the quarter focused on defining extensions to the Cikoneng and Cibitung resources and on defining and testing new targets to the south.

Exploration

Rorah Kadal

Excavation of trench TR-05 in the north of the prospect was completed (refer Figure 1). The most significant result was 0.6m at 11.8 g/t Au and 6 g/t Ag taken across a north-trending fault-vein in the east leg of the trench. Excavation of trench TR-06, 75m north of TR-05 is in progress.

Structural Exploration Model

Follow-up geological mapping in the areas surrounding Cikoneng-Cibitung-Cibeber was commenced to better define the structural context of mineralisation.

Data processing and analysis of 828 structural measurements of oriented core from Cikoneng - Cibitung diamond drill holes was completed and a total of 6 structural sets were identified. These sets correlate well with surface geology and regional scale lineaments interpreted from remotely sensed images and photographs.

This additional information has supplemented the original 1:2,000 scale reconnaissance mapping and will enable a more accurate depiction of structures controlling mineralisation in the district, and improve targeting at the local scale.

Land Access

Support was received from regional government during the quarter with the official zonation of exploration and mining as an allowable land use in the district's spatial plan, and approval to commence a surface exploration program on plantation land to the east and south of the Cibitung deposit, subject to payment of fair compensation to land users for any surface disturbance.

Scout Drilling

Scout drilling commenced late in the quarter at the Rorah Kadal prospect located 800m southwest of the Cibitung deposit. One diamond drill hole was completed, AC-053, and another is planned early next quarter. The drill hole collar location is shown on Figure 1 and summary geology on Figure 2. Significant results are summarised in Table 1.

Extension Drilling

Drilling commenced in early October to test for strike and plunge extensions at the Cikoneng and Cibitung deposits. Four pre-collared diamond drill holes (AC-049 to AC-052) were completed during the quarter for a total of 1,518m. Drill hole collar locations are shown in Figure 3. Significant results are summarised in Table 2.

• AC-049 was drilled to test for strike extensions to the north at the base of the Cibitung shoot. The hole intersected the main vein from 329.25 to 338.60m (9.35m; refer Figure 4). The main vein comprises vein breccias and crustiform and colloform-banded vein with some clay fault-gouge in the hanging wall.
  
  
• AC-050 was drilled to test for strike extensions to the south at the base of the Cibitung shoot. The hole intersected the main vein from 380.40 to 422.90m (42.5m; note: acute angle intersection), which comprises banded veins, vein breccia, vein stockwork and clay-rock fault-gouge.
  
  
• AC-051 was drilled to test for strike extensions to the south at the base of the Cikoneng Shoot beneath the intersection of the Lower Hanging Wall Lodes (LHW Lodes) with the Main Vein. The hole intersected the main Cikoneng vein from 377.05 to 427.30 (50.25m, refer Figure 4). The hanging wall part of the main vein is characterized by clay-rich fault zones and vein breccias. The hole demonstrates the continuance of the main vein and mineralisation beneath the LHW Lodes and extends the strike of the resource more than 50m to the south.
  
  
• AC-052 was designed to test for extensions up-plunge to the LHW Lodes at Cikoneng. These fault-veins pass through the interim ramp access design adopted in the Preliminary Feasibility Study. The hole confirmed the location of these fault-veins but returned no significant mineralisation.

Preliminary Feasibility Study (PFS)

It is planned to carry out an updating of the PFS by Q2-2003 to take into account new information and increased gold price.

The Cibitung and Cikoneng resource estimates will be updated by late in the first quarter 2003. This will include the 6 confirmation re-drill holes completed after the June 2001 resource estimate, the recently completed extension holes and a revised structural interpretation of the faults and the lodes.

Based on the revised resource estimates, and the recent significant increase in gold price (from US$300/oz at the time of the study to approximately US$350/oz currently), a new mining plan will be developed. The application of lower cut-off grades will be considered, in addition to a revised extraction plan, and the project economics will then be updated.

MT ALEXANDER GOLDFIELDS

Mt Alexander Goldfields

During the quarter, data review and compilation work commenced within the two project areas held by Mt Alexander Goldfields N.L. in the Central Victorian Gold Belt. A regional exploration office has been established at Chewton that is now staffed by four geologists, each with experience in the Central Victorian slate belt style of mineralization.

These Central Victorian Goldfields, centred on Bendigo and shown on Figure 5, have produced in excess of 30 Million ounces of gold (950 tonnes). The Company's two project areas - the Raywood Sebastian Project and the Mt Alexander Goldfield - are located within known goldfields along strike from the Bendigo Goldfield and the projects are both designed to seek new occurrences of near surface repeats of Bendigo style gold mineralization.

Mt Alexander Project

The Mt Alexander Project is centred on the historic Mt Alexander or Castlemaine Goldfield. The Company holds 213 km² of exploration licences and 225 ha of mining licences encompassing all of the areas of known production from this field. Recorded gold production totals 5.6 million ounces, of which 884,000 ounces was produced from hard rock sources. The largest single producer, Wattle Gully, yielded 1.23 million tonnes of ore at a recovered grade of 10.5g/t gold (415,000 ounces of gold) over a strike length of 900 metres and to a depth of 325 metres.

Over 2000 occurrences of hard rock gold mineralization have been noted to occur within the tenements. Of these approximately 40 have produced in excess of 1000 ounces of gold and three have produced in excess of one tonne of gold. Most of the historic mining took place in the period 1852 to 1890 and very little systematic modern day exploration has been carried out.

The style of mineralization within the goldfield is typical of the deposits within the Central Victorian Slate Belt. As at Bendigo, Fault Reefs, associated with west dipping reverse faults, are major features for gold mineralization. Other associated styles include bedded reefs, spur reefs, saddle and neck reefs.

Review and compilation of the large amount of historic mining and past exploration data has commenced with a view to building structural and predictive models for the goldfield. These models will then be used to select and prioritise targets for exploratory drilling.

The deepest mines within the field were developed to around 350 metres below surface with most in the range of 100 to 200 metres deep. At Bendigo, this style of mineralization is known to repeat rhythmically to depths in excess of 1500 metres. The initial target zone for the Company's exploration is within the zone between 100 and 500 metres below the surface.

Sebastian - Raywood Project

The Raywood - Sebastian Project area lies 17 kilometres to the north west of Bendigo and is located within the same structural corridor that defines the Bendigo Goldfield. The company has Joint Venture agreements covering two exploration licences with a total area of 81 km². Approximately half of the area of the tenements is covered by younger sediments of the Murray Basin and hence the basement has not been explored for gold mineralization.

Historic production came from the Frederick the Great Mine at Sebastian, which produced 186,000 ounces of gold at a recovered grade of around 10g/t. from a west dipping fault reef. The mine was worked to a depth of 270 metres before closure in the 1890's. Diamond drilling below the old workings, carried out by WMC in the 1980's, showed evidence of mineralization at 300 to 400 metres below surface. The intersection returned 20 metres of carbonate alteration and quartz veining and visible gold. No further drill testing of this zone has been carried out.

More recently, a prior tenement holder, Metex Resources, began to systematically explore for mineralization below the younger sedimentary cover. Metex located the Mopoke anomaly under 20 metres of cover rocks. Shallow RC drilling outlined a zone of auriferous quartz mineralization in basement rocks that is 700 metres along strike and varies from 75 to 150 metres across strike. Assay results returned sporadic and spiky grades typical of this style of mineralization. The drilling is too shallow and too coarse to accurately define the mineralization but it does indicate the presence of a hitherto undiscovered mineralized system. No further definition drilling has been carried out on this prospect.

Compilation of existing mining and exploration data was commenced by the Company during the Quarter, with particular reference to available airborne and ground geophysical data. The initial aim is to attempt to define major structural trends that may be related to mineralization and which may be used to target exploration in covered areas of the leases.

The Company is fortunate in having the Mopoke anomaly to use as an orientation study for assessing geochemical and geophysical techniques that may have application in locating mineralization under younger cover rocks. Planning for this study is now complete and field work will commence in the first quarter of 2003. As part of this study, it is planned to drill one diamond hole into the Mopoke anomaly to define the geological and structural nature of the auriferous quartz mineralization.

During the Quarter the Company appointed Mr Ian Price as its new Managing Director and CEO. Mr Price's significant project and mine operations experience will be advantageous to the Company as it moves from a purely exploration to a mine development focus.

Mr Price replaced Mr John Carlile who will continue to provide his substantial exploration expertise to the Company as a non-executive director whilst Mr Bob Barton also joined the Board as a non-executive director.

Equity in Cibaliung Project

In accordance with the terms of the Joint Venture Agreement the Company's interest in the Cibaliung Project increased to 73.02% at the end of the third quarter 2002 due to sole funding of joint venture expenditure.

EXPENDITURE

Exploration expenditure during the quarter was A$498,965 made up of A$423,733 for the Cibaliung Project and A$75,232 for the Mount Aleaxander Goldfields Project.


In accordance with Australian Stock Exchange Listing Rule 5.10, this report is based on information compiled by Mr. Drew D. Henry as Consultant Geologist for the Company. Mr. Henry has consented in writing to the inclusion of such information in this report in the form and context in which it appears. Mr. Henry is a Fellow of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists and holds the relevant qualifications as a "competent person" as defined by the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves.

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