30 November 2005Chairman’s Address to Annual General MeetingGood...

30 November 2005

Chairman’s Address to Annual General Meeting

Good morning Ladies and Gentlemen. It is after the appointed hour and a quorum is present so we may commence the meeting. My name is Kim McGrath and I am your Chairman.
Before I commence my review of the year ended 30 June 2005 and update you on the developments since that date, I would like to introduce you to my fellow directors.
Executive Director, Ms Susan Field, who is also Company Secretary, non-executive Mr Bruce Tomich, and Mr Gino Vitale, the Managing Director of the Company. Mr Martin Bennett who is non-executive director has been unavoidably detained in Court on an urgent client matter this morning and sends his apologies.
We also have with us this morning Dr James Searle, a director elect of the Company. The other director elect is Mr Mike Kitney who was unable to join us from interstate this morning, and from whom we also have an apology.
I would like to also introduce Mr Peter Smith, director of Deloitte Touche Tomatsu, representing Mr Peter Rupp, and who is available to take questions on the conduct and outcome of the of the audit.
I propose to deliver a short address on the Company’s activities during the year to 30 June 2005 and provide an outline of the Company’s plans for the year ahead in relation to its gold assets and proposed acquisition of copper assets. In the interest of keeping the meeting flowing it would be preferable if any questions on the address could be brought up please at the end of the session rather than during the address.
Subject to time,I propose to invite the Managing Director Mr Gino Vitale to provide a presentation on the Company’s activities at the conclusion of official business and invite shareholders to remain for that presentation.

2005 – Year in Review
During the course of the year the Company completed a very successful drilling programme at its 100% owned Mt Kasi gold project in Fiji, following which independent consultants RSG Global generated a new JORC classified mineral resource estimate of 3.4 million tonnes at a grade of 2.2 g/t Au, for 240,000 ounces of gold.
Our exploration team has completed a regional review and identified and ranked four highly prospective gold targets at Mt Kasi, each with the potential to host similar satellite deposits within a 2 to 5 km trucking distance of a central processing plant at Mineral Hill. The Company plans to test these targets as well as follow-up targets as soon as practicable in the coming quarter.
When the directors signed off on the Annual Report in October we observed the gold price at time of writing was around US$472 per ounce (A$620 per ounce). As we meet for this AGM, the current spot price is hovering at around US$ 498 (A$673) per ounce and the reported commodity price outlook remains in an uptrend, having hit over US$500 per ounce during trading yesterday. The substantial global increases in fuel and power costs as well as capital costs associated with increases in steel, labour and other key inputs however, mean that projects that were once economically viable under a lower capital and operating cost structure must now achieve a higher minimum threshold in the scale of operations to be financial ‘goers’. Mt Kasi is no different and we are now seeking to increase our resource and reserve position so that we can meet the necessary hurdle rates to achieve economic viability as a stand-alone project.
One very positive aspect of the Mt Kasi project is that its profitability is expected to be positively impacted by the near surface open cut nature of mining and a low waste to ore mining ratio. The Company believes the best way to counter the negative impact of increasing input costs is to continue to focus on finding more higher grade, near surface mineralization and build up the overall resource position of the project to increase mine life.
In early March 2005 the Company refinanced a $3.5 million loan maturing at that time with the bulk of this sourced from proceeds of a $3.0 million loan facility from Macquarie Bank Limited. Without going into the details here, Macquarie has subsequently agreed to reduce the balance of this facility by subscribing to an initial $250,000 in equity on the same terms as the public Prospectus Offer dated 3 November 2005 (on which subject I will comment on shortly), provided the Company achieves full

subscriptions of $4.0 million and a further $250,000 if oversubscriptions of $1.0 million are achieved. Macquarie has also agreed to extend the term for the balance of the facility by one year to 28 February 2008 if the initial reduction of $250,000 is made. Depending on the overall level of equity raised via the Company’s proposed public offer, these arrangements could result a reduction of the outstanding principal from $3.0 million to $1.75 million, a more manageable level going forward. The Board regards this preparedness on the part of Macquarie to share to take equity risk as a vote of confidence in the company’s future and in the upside of the Company’s projects.
On 8 July 2005 the Company announced it had reduced other debt by a total of $900,000 during this calendar year. Two items of litigation left over from the Company’s previous foray into technology investment have also been settled, clearing the way for management to fully focus its energies on the development of the Company’s resource projects.

Redbank Copper Project

On 31 August 2005, the Company announced that it had reached agreement to purchase 100% of the issued capital of Redbank Mines Limited (to be renamed Redbank Operations Pty Ltd), thereby effectively acquiring 100% of the assets that comprise the Redbank Copper Project, located in the Northern Territory.
SRK Consulting has estimated JORC classified copper resources at Redbank of 4.2 million tonnes at a grade of 1.5% copper and they report in the Prospectus issued by the Company on 3 November 2005 that the project has excellent exploration upside, with immediate drill targets to be followed up to generate possible increases in the resource. The present resource contains approximately 65,000 tonnes of copper metal equivalent, which based on today’s spot price of copper of US$1.98/lb (almost US$4,400 per tonne) (or A$2.68/lb), has an in situ value in excess of around US$280 million (or A$380million).
The proposed acquisition of the Redbank project comes at a time when the demand for copper is strong and the supply side in tight, with the spot market price at historical highs. Upon completion of the acquisition, which is be put to shareholders for approval today, the Company anticipates it will become a small copper producer by the first quarter of 2006. The Company plans to treat high grade oxide stockpiles utilising existing mine infrastructure and plant and equipment and expanding production from the present pilot scale levels of production. The introduction of copper to the project portfolio will also diversify the Company’s risk exposure to a second commodity in addition to gold.

Two new directors, Dr James Searle, a geologist, and Mr Mike Kitney, a process engineer and metallurgist, have agreed to join the board upon completion of the transaction. Their contribution is expected to substantially enhance the technical depth of the Board. The meeting today will be asked to consider an important condition precedent, namely shareholder approval for the issue of new shares forming part of the consideration and approval for the new issue of shares to raise at least $3.0 million in fresh capital for the Company. I am pleased to report that the Company has now received applications exceeding the minimum subscription level, therefore subject to final bank clearance of subscription monies, the Company anticipated these important conditions will be met, thereby enabling the Company to proceed with the acquisition. However there is continuing interest been expressed and so the Director may consider a short extension to allow these applications to be made.
The Company commissioned Ernst and Young as independent expert to provide an opinion on the fairness and reasonableness of the transaction; the report was attached to the Notice of Meeting sent to shareholders and concludes that the transaction is both fair and reasonable to the unrelated shareholders.

Restructure for the Future and Public Offer of Securities
As part of the process of re-positioning the Company for future growth, shareholders will today be asked to approve the consolidation of the Company’s capital, details of which are contained in the Notice of Meeting. Shareholders will also be asked to consider changing the Company’s name “Redbank Mines Limited”, subject to the acquisition of the Redbank Copper Project going ahead. As previously mentioned, the Company has made a public offer by means of a prospectus to raise $4.0 million, to fund the new acquisition and to provide funds for exploration at Mt Kasi as well as Redbank, and for working capital. As you will be aware, the offer has been made to all existing shareholders and I am pleased to report that there has been a widespread positive response from shareholders who have so far taken up a significant portion of the Offer.

Pro-rata Bonus issue of Options
On 8 September 2005, the Company announced its intention to make a free pro-rata bonus issue of options to all shareholders on the register 30 days following the completion by the Company of the public offer. This will give shareholders a free tradeable security for every two shares they hold on the record date.
The Directors consider that the initiatives outlined and to be considered by shareholders today, will lay the foundation for a new growth phase for the Company. Subject to their approval of the resolutions being considered today, during the next few months management will be focused on absorbing the acquisition of the Redbank Copper project and on completing detailed planning of its ne3xt drilling programme at Mt Kasi.
On behalf of my fellow directors I would liker to acknowledge the efforts of the management team during the past twelve months for their efforts in ensuring the Company is able to put in place the necessary building blocks to enable it to go forward and take advantage of what is shaping up to be a sustained growth period and exciting times for companies in the gold and copper sectors.

Ladies and Gentlemen, I would like to thank you for your time and support, and look forward to participating along with shareholders in an improved and productive year ahead, and to addressing you again with some very positive results this time next year.
Kim W McGrath
Chairman of Directors
Perth, 30 November 2005

In my opinion the future is looking great
Gold going up
Copper going up

Redbank Copper Project acquisition looks like it's going ahead

Constructive comments & discussion please.
I hold bks
Always seek professional investment advice before investing & please read below.