REVIEW OF OPERATIONS1.1 INDONESIASihayo Gold Project, Sumatra...

REVIEW OF OPERATIONS

1.1 INDONESIA

Sihayo Gold Project, Sumatra (75%)
Ongoing resource definition and extension drilling continued throughout the half year ended 31
December 2010.

The resource definition and extension program with up to five diamond drilling rigs has focused on the
northern lode adjacent to the main Sihayo resource and on two lodes immediately to the south of the
current resource boundary.

These two areas of mineralisation will form the basis for the first incremental increase of the Sihayo
JORC compliant resource estimate due at the end of March 2011.

Diamond drilling will continue as a combination of resource definition and exploration drilling along
strike from Sihayo resource. The drill program will be a combination of extending existing drill holes to
seek preferential lithological boundaries that potentially host gold bearing jasper and new holes to test
extensions of known minerals.

The possible northwest and southeast extensions of the Sihayo resource represent a combined
strike length of approximately 4.5km.
Tables 1 and 2 below summarise significant results for drill holes SHDD 378 to SHDD412 and reentry
of SHDD121, SHDD122 and SHDD114 and drill holes SHDD413 to SHDD457 and re-entry of
SHDD354 and SHDD358.

Figure 1 below is a surface plan showing the current Sihayo and Sambung resource outlines, reported
significant results outside the current resource boundary and the proposed ongoing drill plan for the
March quarter.

Regional Activities

Detailed mapping and sampling of the Tambang Tinggi prospect continued throughout the half year
and drilling recommenced in February 2011.
The prospect covers an area of approximately 2.8km east to west and 1.6km north to south.

Within this area are extremely encouraging gold and copper results in drilling (historic scout program),
rocks and soil samples. See Table 3 below for the highest grade rock chip geochemistry results.
An IP survey commenced during the half and is now approximately 50% complete.

Sihayo Pungkut extensions

A detailed soil sample program was completed during the half and grid establishment was completed
for an IP survey to aid in drill targeting along strike and at depth from the current Sihayo and Sambung
Resources.

Hutabargot Julu

The Hutabargot Julu prospect is an epithermal gold style propsect with multiple sub-parallel veins that
have yielded historic drill intercept of 5m @ 37.7 g/t from 47m. The prospect is located
approximately 7km southeast of the main Sihayo resource and exploration commenced in October
2010. This initial work program has been focused on grid re-establishment for soil / IP surveys,
geological mapping and rock chip sampling to aid in drill target definition.

Airborne Magnetic Survey

An airborne magnetic survey over the entire COW commenced in January 2011 and is due to finish in
March 2011. The airborne survey will have a particular emphasis on known porphyry copper gold
style targets such as; Singalancar, Tambang Tinggi, Rura Balancing, Namilas, Siandon and
Mandagang.

Definitive Feasibility Study (�DFS�)

The DFS has progressed well during the December half and remains on schedule for end of March
completion.

During the half year the metallurgical test program was completed. The test work has confirmed that a
standard CIL plant configuration is the preferred option.
The Process Flow Diagrams, design criteria and equipment selection has been finalised.

The geotechnical programs to assess the ground conditions in the selected sites for the Tails Storage
Facility (TSF) and plant site have been completed and the DFS design of both the TSF and plant site
have been completed.

The site water balance and hydrology investigation were also completed.

DFS Engineering has been completed with the final costings for the Opex and Capex now being
analysed and optimised.
Golder and Associates have completed the environmental baseline study and now completing the full
AMDAL study as required by Indonesian regulations.

Indonesian consulting engineers, PT. Indra Karya (�PTIK�) in association with engineering firm SMEC
(Snowy Mountains Engineering Corporation), continued work on the detailed Feasibility Study into the
potential supply of hydro electric power to the Sihayo Pungkut gold project. The feasibility study is due
for completion by the end of May.

1.2 MALAWI (URANIUM) 100%

No exploration activities were carried out during the period.
All exploration licences were renewed during the half year.

1.3 INDIA (DIAMONDS) 9%

No progress has been made during the period in resolving
the legal status of the diamond tenements
in India.
The Company remains optimistic that its Indian JV Partner will be successful in gaining access to the
tenement and application areas in the future. In the mean time there is no cost to Sihayo in
maintaining its current equity.