QUARTERLY REPORT

Quarterly Report

Three months ending
31 March, 2001

Cibaliung Project - West Java, Indonesia

Advanced Exploration

• 12 holes were completed during the quarter for a total of 2,921m.
• A total of 35 holes aggregating to 9,660m have been drilled to date.
• A high-grade core to the Cibitung shoot has been identified.
• Significant vein intercepts (3 g/t cut-off) were:
  
  AC-027A : 16.20m @ 16.57 g/t Au & 114 g/t Ag
  AC-031 : 27.05m @ 9.11 g/t Au & 64 g/t Ag

Prospect Evaluation

• Scout drilling in the Melinjo / Cibeber area confirms vein system.
• Exploration work at Batulawang has identified quartz-adularia veining.

Corporate - Australia

• Pieter W. Greeff was appointed a Director on 14 March 2001.
• Bruce J. Watson resigned as a Director on 9 April 2001.

Expenditure

• Total exploration expenditure for the quarter was A$ 700,512.

John C. Carlile
Managing Director & CEO
19^th April, 2001

EXPLORATION

Cibaliung Project - West Java, Indonesia

Cibitung Shoot - Diamond Core Drilling

Recent drilling at Cibitung has indicated the presence of a high-grade core within the shoot. Five holes (AC-027, AC-027A, AC-018A, AC-030 & AC-031) were drilled during the quarter for a total of 1,393.43 metres (see plan in Figure 1 & cross sections in Figures 2a & 2b). Assay values from the high-grade zones intersected are shown in Table 1. Average grades have been calculated using a 3.0g/t Au cut-off with no top-cut applied to the raw assay data.

Figure 3 is a schematic longitudinal projection that illustrates the extent of current drilling below the existing Cibitung & Cikoneng Shoot resource blocks.

Due to poor core recovery in hole AC-027 the hole was re-drilled as AC-027A at the cost of the drilling contractor. The twinned hole demonstrated that almost 50% of the total vein intersection had been lost. Detailed correlation of the two intercepts, which are only seven metres apart, showed that the lost core comprised mainly broken and friable silica clay breccia material. Assays from the two intercepts are presented in Table 2 for comparison.

In light of these results, site geologists collected 23 samples of mineralised intersections from nine holes, including AC-027A, to determine the distribution of gold within the quartz-rich and clay-rich fractions. Individual samples comprising both clay and quartz, were segregated into fine and coarse fractions using a 60# sieve and the two fractions were analysed separately.

Average results for the 23 samples are as follows:

• Clay-rich fraction 26.92 g/t Au
• Quartz-rich fraction 9.92 g/t Au

The gold grade of the clay fraction is on average 2.8 times that of the quartz fraction and the clay fraction represents 35% of the sample weight. From these results, it appears that the gold assays returned from the vein intercepts where fine material has been lost during drilling could be significantly lower than if full recovery has been achieved. Comparison of the results of AC-027 and AC-027A support this conclusion.

Detailed review of digital core photographs and re-logging of core has identified five other holes (AC-06, AC-010, AC-018, AC-019 at Cibitung & AC-021 at Cikoneng) where reported gold grades of vein intersections may have been under estimated due to unrecognised loss of mineralised material in the core.

Drilling of twin holes for these has commenced at the cost of the drilling contractor. Hole AC-018A was completed and intersected the vein approximately 20 metres from AC-018; too far away for any meaningful comparison to be made.

Holes AC-027A and AC-031 have shown that the Cibitung Shoot has a higher-grade core, similar in thickness and tenor of gold grade to the core of the Cikoneng Shoot. Hole AC-030, drilled to approximately the same elevation as AC-031 but 40 metres south has intersected the vein over a downhole length of 25.75 metres. Assay results are awaited.

Cikoneng Shoot - Diamond Core Drilling

Three holes were completed at Cikoneng (AC-024, AC-032 & AC-033) for a total of 722.40 metres (see plan in Figure 4 & cross section in Figure 5). Assay values from the high-grade zones intersected are shown in Table 3.

All the holes were designed as step out holes from the main shoot. AC-022 (drilled in the previous quarter but with assays pending at the time) tested for extensions to the north and at depth. It demonstrated that the main structure is present however, gold grades are lower.

Holes AC-024, AC-032 and AC-033 tested for extensions to the south. These holes show that the vein system persists to the south and gets stronger with depth, however high-grade gold mineralisation is absent and these holes may indicate the southern extent of the Cikoneng Shoot.

Other Prospect Drilling

Four shallow scout diamond core holes (AC-023, AC-025, AC-026, AC-028 & AC-029) totalling 805.05m, were drilled to test the known vein systems at Cibeber and Melinjo (see plan in Figure 6). All the holes encountered quartz veining as expected however, no significant gold mineralisation was found except in AC-023 (drilled in the previous quarter) which intercepted 0.60m @ 7.39 g/t Au & 41 g/t Ag from 127.55 metres. These holes tested the southern extension of the system. Additional drilling is planned to the north towards Cikoneng where recent mapping indicates potential for higher grades exists.

Additional Exploration

An orientation Mobile Metal Ion (MMI) soil program was completed over the Cikoneng-Cibitung prospects successfully pinpointing the known veins. The successful application of this technique is very encouraging and routine surveying to locate possible extensions and shoot repetitions around the known veins, including Cibeber-Melinjo, is now ongoing.

MMI is a technique that selectively detects the mobile gold ions present in soils. The mobile ions travel upward from a mineralised source and allow detection of mineralisation through post-mineral cover rocks and soils. Post-mineral cover is one of the key problems to be overcome in detecting mineralisation in the young volcanic terrains of Indonesia.

Exploration at Batulawang has recognised the presence of strong NW trending structures with NNW striking quartz-adularia veins associated with illite-smectite alteration (see plan in Figure 7). The area is considered to be encouraging for further exploration. As a veneer of soil and post-mineral cover extends over much of the prospect, the next phase of exploration over this area will be MMI soil sampling.

Preliminary exploration at Bangkondol failed to find any significant signs of mineralisation and this prospect has been downgraded.

CORPORATE

Equity in Cibaliung Project

In accordance with the terms of the Joint Venture Agreement the Company's interest in the Cibaliung Project increased to 67.14% at the end of the quarter due to sole funding of joint venture expenditure.

Changes of Directors

Mr. Pieter W. Greeff was appointed as a Director on 14 March 2001. Mr. Greeff has over 30 years experience as a mining engineer in Australia and overseas and has extensive operating and development experience in gold, diamonds, base metals and coal.

Mr. Bruce J. Watson resigned as a Director on 9 April 2001. The Company has expressed its gratitude for Mr. Watson's significant contributions during his 3-year tenure on the Board. It is the Board's intention to recruit a replacement in due course.

Annual General Meeting

The Company's Annual General Meeting will be held at the Hotel Intercontinental in Sydney at 10.00 a.m. on Tuesday 22 May, 2001

Cibaliung Resource Statement

The company plans to produce an updated resource statement for the Cibaliung project during the next quarter. The previous resource statement issued in November 1999 stated an inferred resource of 993,000 tonnes @ 9.78 g/t Au & 57.4 g/t Ag with contained metal of 312,230 oz gold and 1.83 million oz silver.

EXPENDITURE

Exploration expenditure in Indonesia during the quarter amounted to A$ 700,512.

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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