announcement

Ore Production Commences
The first ore at the Paulsens gold mine
has been delivered to surface on schedule.
Face sampling has confirmed high gold grades.
Underground development has provided access
to the orebody on the 1082 mRL and 1067 mRL levels,
approximately 120 and 135 metres below
surface respectively.
On the 1082 level, the cross-cut face is currently
within the Lower ore zone. Assays of rock chip samples
across the 4.7 metre wide face (running parallel to the
strike of the orebody) averaged 27.3 g/t.
On the 1067 level, development has cut through
the Lower ore zone. Visible gold was observed
and rock chip sampling of the cross-cut wall returned
2.8 metres at an uncut grade of 68.1 g/t (38.8 g/t if top
cuts consistent with the resource estimate are applied).
Orebody true width within the cross-cut is 1.5 metres.
The first assay results are significant and highly
encouraging, however they should not be interpreted
to represent the resource as a whole. The mining
reserve grade remains 10.7 g/t.
Orebody geometry observed underground is consistent
with expectations. Most significantly, the mineralisation
is readily identifiable, with visible assessment of ore
grade boundaries precisely matching assay results.
Development headings on the 1075 and 1060 mRL levels
are currently approaching the orebody. By month’s end
six ore drives will be in operation providing an initial ore
stockpile and sufficient stoping areas to sustain
production at the planned 250,000 tonnes per annum.
First ore production and visual confirmation
of orebody characteristics are important project
milestones. Ore will be stockpiled on surface prior
to the commencement of gold production in May 2005.
Colin G. Jackson
Chairman
17 January 2005
ASX
SHAREHOLDERS
REPORT
Enquiries regarding
this report may be directed to:
Colin G. Jackson
Chairman
Telephone 0417 929 107
or
Brett Lambert
Acting Chief Executive Officer
Telephone (08) 9346 0000
Overseas +61 8 9346 0000
NuStar Mining Corporation Limited
ABN 11 060 156 452
Level 2, 34 Colin Street
West Perth
Western Australia 6005
Telephone (08) 9346 0000
Overseas +61 8 9346 0000
Enquiries regarding the takeover offer
by Sedimentary Holdings should
be directed to:
Colin G. Jackson
Chairman
Telephone 1800 811 109 (toll free)
www.nustarmining.com.au