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AUGUSTA GOLD PROJECT SUMMARY - COSTERFIELD, VICTORIA



Costerfield is one of Australia's most important gold-antimony provinces and has been the site for a new discovery of high grade gold and antimony ore (Augusta Deposit). Technical and financial studies predict strong returns based on the current ore reserves and excellent potential for future growth.

The essential features of the project are:
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A probable mining reserve of approximately 204,000 tonnes at 10.9g/t gold and 5.7% antimony.


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A small open cut that is mined and completely rehabilitated within 12 to 18 months.


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On going underground operations that have a very small surface disturbance.


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Capital expenditure in the order of $12.5 million generating cash surplus of approximately $ 6.5M per year.


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The creation of approximately 40 jobs all of which will be resident in the local area.


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A mine life of 3 years based on probable reserves at 65,000 to 75,000 tonnes per annum.


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Inferred resources and exploration potential that are expected to provide additional years of operation.


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Annual production of approximately 8,200 ounces of gold bullion plus 5,500 tonnes of antimony concentrates containing 12,900 ounces of gold and 3,300 tonnes of antimony.







Resources and Reserves





AUGUSTA MINERAL RESOURCES

The Mineral Resources of the Augusta deposit, as estimated by McArthur Ore Deposit Assessments Pty Ltd (MODA) in August 2005 are:

Table 1 - Augusta Mineral Resources

Category


‘000 Tonnes


Density


g/t Au


%Sb


Contained

Au (oz)


Contained

Sb

(t)

Indicated


116


2.84


22.6


11.7


84600


13660

Inferred


4


2.75


15.7


6.2


2200


270

TOTAL


120


2.84


22.3


11.5


86800


13930



AUGUSTA ORE RESERVES

The Ore Reserves of the Augusta deposit, as estimated by McArthur Ore Deposit Assessments Pty Ltd (MODA) in August 2005 are:

Table 2 - Augusta Ore Reserves

(Note: All ore reserves tabled below are classified as probable)



RESERVES (PROBABLE)


Tonnes


Density


Au


Sb


Contained

Au


Contained

Sb




('000)





(g/t)


(%)


(oz)


(t)

Open Cut Reserve


11


2.40


17.3


3.0


6,200


330

Underground Reserve


193


2.69


10.5


5.8


65,300


11,250

TOTAL RESERVES


204


2.67


10.9


5.7


71,500


11,580

N.B. rounding errors may occur

The Augusta resource/reserve estimate was prepared by Steven Richardson BSc(Hons) MAusIMM, Shane Marshall BEng MAusIMM and Ray Hazeldene GradDip AppGeol MAIG MAusIMM, under the direct supervision of Gary McArthur PhD FAusIMM MMICA MSEG and Adrian Molinia BE(Hons) FAusIMM CPMin. Apart from Ray Hazeldene (employed by Mindeco Pty Ltd) all are employees of McArthur Ore Deposit Assessments Pty Ltd (MODA). Dr McArthur and Mr Molinia have 30-35 years’ experience as professionals in the Australian mining industry, mainly involved in the underground extraction of base metal deposits. They also have extensive experience in the estimation of resources and reserves over a wide variety of deposit styles. As such, Dr McArthur and Mr Molinia both meet the requirements as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (AusIMM/AIG/MCA, 2004), to be Competent Persons for the estimation of Augusta Mineral Resources and Ore Reserves.