capital reduction and in specie distribution of na

Interesting announcement. I own a truckload of these. Any comments welcome on what effect this announcement may have. So far the market has taken little interest.

Share price over the last two weeks has been in consolidation mode around the 3c area with support at 2.8c following a solid move from 2.8 to 3.6. Some large sells have been appearing around 2.9 and 3c but have been snapped up quickly as they appear.

GOLDEN VALLEY MINES LIMITED 2003-02-18 ASX-SIGNAL-G

HOMEX - Perth

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CAPITAL REDUCTION AND IN SPECIE DISTRIBUTION OF NAVIGATOR SHARES

The Board of Golden Valley Mines Limited ("Golden Valley") has
resolved to implement an equal reduction of capital by way of an in
specie distribution of all of the shares it currently holds in
Navigator Resources Limited ("Navigator") to its shareholders,
subject to obtaining appropriate regulatory and shareholder approvals
for the transaction.

The Record Date for determining Golden Valley shareholders'
entitlement to Navigator shares is yet to be decided but will be
announced in due course. The in specie distribution to Golden Valley
shareholders will be on a pro-rata basis, with shareholders likely to
receive approximately 1 Navigator share for every 15 Golden Valley
shares held..

Navigator is currently a wholly owned subsidiary of Golden Valley,
with 21,000,000 fully paid ordinary shares on issue. Navigator is
expected to consolidate its capital to 14,313,434 fully paid ordinary
shares, prior to Golden Valley conducting the in specie distribution
of those Navigator shares.

CONVERSION OF DEBT

Immediately following and subject to the in specie distribution of
Navigator shares to Golden Valley shareholders, Golden Valley will
also release Navigator from a debt of $500,000 in consideration for
the issue of 3,333,333 Navigator shares to Golden Valley (ie deemed
issue price of $0.15 per Navigator share).

DIRECTOR PARTICIPATION

Following appropriate regulatory and shareholder approvals, Mr Tom
Sanders, the Managing Director of Navigator, will be issued with
500,000 Navigator "bonus" shares for no issue price, conditional upon
the successful admission of Navigator to the Australian Stock
Exchange ("ASX"). Furthermore, it is proposed that Mr Sanders will be
issued with 2,000,000 "bonus" options exercisable at 20 cents each on
or before 30 June 2006. The issue of the "bonus" options is also
conditional upon the successful admission of Navigator to ASX.

NAVIGATOR SPIN-OFF FLOAT

It is proposed that, following the in specie distribution of
Navigator shares to Golden Valley shareholders referred to above,
Navigator will make an initial public offering of its shares to raise
approximately $3,000,000 for the purposes of satisfying certain of
the conditions for admission of the company to the Official List of
the ASX.

A prospectus for the offer of Navigator shares will be made available
by Navigator when the shares are offered. Anyone who wishes to
acquire shares in Navigator will need to complete an application form
that will accompany that prospectus. Golden Valley shareholders will
be given a priority right to participate in the initial public
offering of Navigator shares.

As part the overall process, a new Board of Directors will be
appointed to Navigator, all of which will be independent of Golden
Valley.

SEED CAPITAL RAISING

Navigator will also shortly be seeking to raise approximately
$150,000 in seed capital from certain persons which Navigator is
entitled to issue securities to, without a prospectus, for the
purposes of funding the process of the initial public offering.

NOTICE OF MEETING

A Notice of Meeting and Explanatory Memorandum seeking shareholder
approval for certain of the transactions referred to above will be
dispatched by Golden Valley shortly.

B Sergeant
COMPANY SECRETARY