market update as at 16 august 2006

Market Update as at 16 August 2006
Your company is pleased to report considerable activity in the period since our last announcement to the market:
MT CARLTON DRILLING PROGRAM COMMENCES

Further to our last announcement to the ASX on 27 July 2006 Conquest Mining Limited (ASX Code:
CQT) has initiated a drilling program with two rigs at Silver Hill. Work is progressing on two fronts, with
diamond core drilling to duplicate recent high grade gold and silver intersections, and reverse circulation drilling to extend the resource.

Priority targets include the high grade silver intersection in hole HC06RC39, and high grade gold
intersections in holes HC06RC53 (Figure 1 below) and HC06RC52 (6m @ 17.3 g/t gold).

Holes are being drilled on a 25m spacing to provide detailed geological information and accurate assays to
compare with previous reverse circulation percussion holes. Core from these holes will also be used
for metallurgical test work.

A HQ diamond core hole has commenced next to HC06RC39 which intersected 28m at 4,350 g/t silver.
A 70m pre-collar for diamond drilling has been drilled next to hole HC06RC53 (which intersected 12m
@ 27.6 g/t gold).

Further assay of 1m samples from this high grade gold intersection using gravimetric fire assay has returned 12m @69.3 g/t gold from 120m depth including 1m at 483 g/t gold.

The reverse circulation percussion drilling rig will continue exploration drilling on 50m spaced section
lines to extend the deposit, and will also test new targets as required.

Drilling is planned to continue for the remainder of the year with the objective of defining the extent of
the new Silver Hill deposit.

DRILLING PROGRAM FUNDING
CQT has determined that a capital raising initiative will not be required to fund its short term cash
requirements in relation to the current drilling program.
The company proposes to accept an arrangement with its Managing Director, for an unsecured
$1 million line of credit (at commercial rates of interest).

That debt facility, combined with $500,000
proceeds from asset sales (see below), and current cash on hand of $1.3 million will fund working
capital requirements until at least October 2006.

Further cash requirements will then be reviewed in the
light of the progress and results of the drilling program.

SALE OF KIMBERLEY TENEMENTS
CQT is pleased to announce that it has recently completed a sale transaction with Timespan Pty Ltd for
the sale of its East and West Kimberly tenements located in northern Western Australia. These tenements were the subject of past diamond exploration activities by the company. Diamond
exploration is no longer a core focus in the company’s future plans and the disposal of the tenements
will allow the company to direct its personnel and material resources to current gold/silver/copper
exploration programs in northern Queensland.

In addition to $500,000 cash consideration (of which
$50,000 deposit has been paid), the company will be entitled to a royalty in the event that commercial
production of diamonds takes place in the future".