QUARTERLY REPORT

Quarterly Report

Three months ending
30 September, 2001

Cibaliung Project - Banten, Indonesia

Advanced Exploration

• 9 diamond drill holes were completed for a total of 2,180 metres.
• In-fill holes have confirmed geological continuity in the Cikoneng shoot.
• Significant Cikoneng vein intercepts (3g/t cut-off) were:
  AC-046: 11.45m @ 8.98g/t Au & 80g/t Ag,
  AC-048: 3.60m @ 10.92g/t Au & 79g/t Ag.

Prospect Evaluation

• Both drill rigs were demobilised following completion of the 1^st phase.
• A total of 58 holes aggregating to 15,384m have been drilled for this phase.
• Surface exploration work will recommence to identify new drill targets.

Corporate

Toka Tindung - Due Diligence

• The company decided not to proceed with the acquisition of Toka Tindung.

Expenditure

• Total exploration expenditure for the quarter was A$427,776.

John C. Carlile
Managing Director & CEO
23^rd October, 2001

EXPLORATION

Cibaliung Project - Banten, Indonesia

Nine diamond drill holes were completed during the quarter for a total of 2,180 metres. This concluded the first phase of drilling at Cibaliung pending further surface exploration work to define new drill targets. Negotiations are proceeding to gain access to other prospective exploration areas.

The nine holes drilled consisted of:

• 2 in-fill holes / AC-046, AC-048 (Cikoneng);
• 4 scout holes / AC-043, AC-044 (Cikoneng), AC-045 (Cibitung) & AC-047 (Cibeber);
• 3 re-drills / AC-04A (Cikoneng), AC-08A, AC-015A (Cibitung).

In-fill Drilling

Two holes were drilled in the Cikoneng Shoot (AC-046 & AC-048). Both holes are highlighted in plan (Figure 1), cross section (Figure 2) and long section (Figure 4). 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.

• AC-046 was drilled as an in-fill hole on section line 5160N (see Figure 2). The vein was intersected as predicted between 162.65m and 182.60m. The main lode is situated on the hangingwall side of the vein structure from 162.65m to 174.10m and returned a grade of 8.98g/t Au & 80g/t Ag over a calculated true width thickness of 8.10 metres.
  
  
• AC-048 was drilled as an in-fill hole on section line 5120N (see Figure 2). The vein was intersected as predicted between 199.85m and 205.00m. The main lode is situated on the hangingwall side of the vein structure from 199.85m to 203.45m and returned a grade of 10.92g/t Au & 79g/t Ag over a calculated true width of 2.54 metres.

Both holes confirmed the geological continuity of the vein, while the width and tenor of grade compare well with adjoining holes.

Scout Drilling

Four extra scout holes were drilled during the quarter. Two holes (AC-043 & AC-044) were designed to test strong Mobile Metal Ion (MMI) geochemical anomalies to the west and south of Cikoneng. The other two holes tested conceptual targets south of Cibitung (AC-045) and north of Cibeber (AC-047).

• AC-043 was located approximately 200 metres south of Cikoneng and was designed to test a strong MMI soil anomaly on the western side of the Cikoneng trend. The hole intersected weak quartz veining between 84m and 96m and a strongly disturbed structural zone between 124m and 145m.
  
  
• AC-044 was located approximately 400 metres west of Cikoneng and was designed to test another discrete MMI anomaly. The hole intersected weak veining from 22m to 24m as well as a structural zone from 61.5m to 72m.

Assay results from the quartz veins in both holes were low and did not explain the MMI anomalies. The structural zones have been sampled and results will be available next quarter. If these zones are anomalous in gold or other pathfinder elements are present, they could cause the MMI anomalies and may be mineralised along strike or down-dip.

• AC-045 was drilled to test for extensions to the vein south of Cibitung. It intersected minor veining between 253.5m and 267.35m with weak gold grades up to 0.2ppm and coincident silver up to 15ppm.
  
  
• AC-047 tested for possible dilation structures to the north of Cibeber. It intersected two narrow unmineralised veins. The second of these veins from 106.90m to 112.89m is associated with shearing and faulting and may be mineralised along strike or down-dip.

Confirmation Re-drilling

The final three re-drill holes (AC-04A, AC-08A & AC-015A) where unrecorded core loss had been suspected have been completed. All three holes confirmed that core recovery in critical vein intersections in the original holes had been acceptable (see Table 2), although unrecorded core loss in other parts of the holes was also established.

• AC-04A (Cikoneng) confirmed that there was insignificant unrecorded core loss from the vein zone intersected in AC-04. However, there were 8 metres of unrecorded core loss in the hole above the vein. The recovery through the vein intercept was lower in AC-04A than in AC-04 and this is reflected in the grades.
  
  
• AC-08A (Cibitung) confirmed that there was unrecorded core loss from the vein intercept in AC-08. However, all of this loss occurred in the footwall contact of the vein, as the hangingwall lode was intact. Excluding the hangingwall stockwork, both holes recorded the same apparent width of 3.55m, and similar grades, 15.77g/t Au for AC-08 and 15.15g/t Au for AC-08A.
  
  
• AC-015A (Cibitung) also established that unrecorded core loss in AC-015 came from the footwall of the vein and not from the main lode on the hangingwall. The main lode intercepts correspond very well when internal waste is included in AC-015A.

Figure 4 is a schematic longitudinal projection that illustrates the extent of resource drilling in the Cibitung & Cikoneng shoots.

CORPORATE

Toka Tindung Gold Project

The Company had entered into a Heads of Agreement on 21^st May 2001 with Aurora Gold Ltd. to acquire its 85% interest in the Toka Tindung Gold Project in North Sulawesi, Indonesia. Following a detailed due diligence process, it was decided not to proceed with the acquisition due to perceived risks associated with various non-technical issues.

Equity in Cibaliung Project

In accordance with the terms of the Joint Venture Agreement the Company's interest in the Cibaliung Project increased to 70.73% at the end of the quarter due to sole funding of joint venture expenditure.

Cibaliung Resource Statement

The Company announced a new resource statement in June 2001 for the combined Cikoneng and Cibitung shoots with an inferred resource of 1,299,000 tonnes @ 10.42g/t Au & 60.7g/t Ag with contained metal of 435,000oz gold and 2.54 million oz silver.

EXPENDITURE

Exploration expenditure in Indonesia during the quarter amounted to A$427,776.

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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