Ann: Quarterly Activities Report , page-2

Just a few thoughts from the quarterly:

- Mongolia no longer a focus, as expected.
- Drilling basically confirmed in the June qtr is a big positive. They've relinquished some higher cost, lower prob parts of the project but if they hit anything economical it won't matter. Obviously shooting for a nice, tight project and testing the water in the most economical location first.
- The appointment of an Indian exploration manager should not be underestimated imo. I would say it's highly likely this fellow will come with a wealth of contacts in India, which could be valuable in sourcing a JV partner. For anyone with a bias against Indian JVs, just look at the support Bharat have provided NWE over the last two years in the Perth Basin.
- Plenty of cash at hand for operating costs and some drilling. Would expect them to hit the market up during the Sept qtr but if the sp rallies they may take advantage sooner...
- Overall a probably the best qtr we've seen in a while. We got some direction, dates and an exploration manager to take charge at Canning. That tells us they're serious, allbeit slow moving. All up andvat the current price i can see motive for holding or buying and very little reason to sell. Happy to have taken a posi again today.

H