Lion Selection Group...Looks Great

LION SELECTION GROUP LIMITED 2002-11-07 ASX-SIGNAL-G

HOMEX - Melbourne

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SUMMARY

East African Gold Mines Limited (EAGM) has announced further
significant exploration success at Nyabigena in Tanzania, both along
strike to the west at Gokona and immediately to the north.

New infill RC drill intersections confirm the discovery of a
significant high grade gold deposit at Gokona. Significant
intersections include:

25m @ 89.5 g/t Au
28m @ 14.9 g/t Au
16m @ 15.9 g/t Au
17m @ 25.7 g/t Au

Large new geophysical targets identified at Nyabigena North and Dett
South have further enhanced the prospectivity of both areas.

In addition, ore reserves at Nyabirama have increased as a result of
the higher gold price (US$310/oz). The increase takes reserves at
Nyabirama from 12.9 mt @ 3.8 g/t containing 1.6 m oz to 18.9 mt @ 3.5
g/t containing 2.1 m oz.

Total reserves at the North Mara Gold Project (including the
Nyabirama and Nyabigena deposits) have increased from 1.9 m oz to 2.4
m oz with resources remaining at 3.8 m oz. Ongoing exploration is
expected to result in further ore reserve and resource additions at
both Nyabirama and Nyabigena (Gokona) early in 2003.

A 210,000 oz pa mine commenced production at Nyabirama in August and,
as a result of ongoing resource growth, an expansion of gold
production capacity is being assessed.

EAGM has deferred an Initial Public Offering (IPO) until 2003 to
enable the value of the recent exploration results to be fully
assessed.

Lion Selection Group has a direct 11.3% shareholding in EAGM, with
associate African Lion holding an additional 6.1%. Lion's Net
Tangible Asset Backing (121 cents at 30 September) values the direct
holding in unlisted EAGM at cost ($10.2 million or 10.2 cps) which
could be conservative in view of the recent successes in mine
development, reserve increase and exploration. It is likely that the
valuation following an IPO could be a multiple of this $10.2 million
amount.

EXPLORATION

GOKONA

* The most recent phase of drilling was completed at the end of
September.

* 29 RC holes were drilled for 3,893 m.

* Largely infilling of the previous 100 m spaced sections to 50 m
spacing and to 120 m vertically (Figure 1).

* A summary of the last intersections is presented in Table 1. This
table does not include narrower and lower grade intersections.

* Economic mineralization has been confirmed over a strike length of
at least 350 m and strong mineralization persists to at least 120 m
vertically below surface (Figures 2, 3 & 4).

* The next program of RC and diamond drilling will recommence at
Gokona in early November and will be completed by early December -
5,700 m of RC and 500 m of diamond drilling is planned. This will
extend the depth to 200 m in addition to selected infill drilling.

* An estimation of resources and reserves will be completed in
January 2003 with a mine plan for Gokona to at least 120 m depth.

NYABIGENA NORTH

* An IP survey has identified a new 2 km long chargeable body north
of Nyabigena parallel to the distinctive north west striking
Nyabigena-Gokona chargeable body.

* Two RC reconnaissance drilling traverses will be completed across
the target during November 2002 with further drilling expected in
2003.

RESERVES

An increase in the gold price (to US$310/oz) has resulted in greater
conversion of resources to reserves at Nyabirama. An additional
500,000 oz has been included in a redesigned 325 m deep open pit.

The updated ore reserve statement for the North Mara Gold Project is
shown in Table 2.

INCREASED GOLD PRODUCTION

An expansion of gold production is being assessed as a result of the
discovery of the Gokona gold deposit and reserve increase at
Nyabirama.


Enquiries:

Robin Widdup/Judith Russell
Telephone: +61 3 9614 8008
Facsimile: +61 3 9614 8009
Email: [email protected]
www.lionselection.com.au