afm ann. con. of oil interests

19 October 2004 The Manager Australian Stock Exchange Ltd Level 4 20 Bridge Street Sydney, NSW 2000

Dear Sir CONSOLIDATION OF OIL INTERESTS;
ISSUE OF SECURITIES

Highlights

• 100% ownership of the 15,900sq km of oil projects in the Kyrgyz Republic achieved.

• Far East Capital Ltd and UK based Loeb Aron & Company Ltd appointed to advise on fundraising options.

• Respected oil industry expert, Mike Sandy co-ordinating joint venture negotiations and oil project development plans. Afminex’s plans to divest non-core assets and consolidate its oil interests have received a boost with two transactions:

• the spin-off of the Company’s major gold assets culminated in the successful stock exchange debut of Perseus Mining Limited on 22 September, with Afminex retaining a 39% interest in Perseus; and

• completion of an agreement to increase the Company’s equity in the highly prospective 15,900sq km package of Kyrgyz Republic oil projects from 50% to 100%.

Acquisition of remaining equity in Textonic Consulting Limited The Kyrgyz Republic oil interests are held by JSC Textonic, a wholly owned subsidiary of Textonic Consulting Ltd (“Textonic”), a Canadian company. Afminex has agreed to lift its equity in Textonic and hence the oil projects from 50% to 100% for cash and Afminex shares spread over three years. The total consideration consists of 50 million Afminex shares and cash of US$2,450,000 if paid within twelve months, US$2,750,000 if paid over two years or US$3,000,000 if paid over three years. The seven Textonic oil projects each have a range of targets, including shallow monocline structures with immediate development potential and deeper oil reservoirs. Potential early development targets include Ashvaz, where an initial P50 reserve covering a small portion of one structure was estimated at 4.6 million barrels, and Charvak, where limited ongoing test production delivers light oil from 93-178m depth. Six of Afminex’s seven projects lie on the margins of the Fergana Basin, which was once connected to the oil-rich Tarim Basin in neighbouring China. There are numerous oilfields in the Fergana Basin, many of which have been producing oil continuously since the 1930s or earlier.//

See announcement for the balance.